Business Interruption Claim Lawyers Can Evaluate and Challenge Denials
Recent government restrictions placed on travel, dining out, and limiting crowd sizes to halt the spread of Coronavirus has put critical stress on many businesses. Restaurants and bars, hair and nail salons, retail outlets, entertainment venues, and hospitality and travel related businesses are just a few of the industries negatively impacted by the “shelter in place” orders being issued across the nation. While residents are being asked to remain in their homes for the health and safety of themselves and others, business owners are immediately faced with the full impact of this unprecedented government action and are naturally wondering what lies ahead for their employees, themselves and the future of their business.
Business owners seeking financial relief may be looking toward business insurance policies that include business interruption, contingent business and/or supply chain coverages. While business interruption policy coverages are typically called upon to cover businesses for losses due to direct loss of business operation from events such as fire or natural disaster, many business owners are questioning whether these forced shut-downs or loss of revenue due to government action will trigger coverage under their current policy. Some policies may include language that includes coverage for shut-downs due to “civil authority” actions like curfews or other loss of access to business premises. The unprecedented nature of this COVID-19 event will raise many questions like these in the weeks and months ahead.
Typical expenses that are covered under business interruption insurance include things like rent, payroll, taxes, loan payments, utilities, and lost revenues. Supply chain issues may create losses as businesses are unable to continue relationships with vendors, suppliers and other partners. Businesses with perishable inventory may face losses due to the shutdown. The potential for loss of income while expenses continue can be overwhelming for any business owner to consider.
There may be challenges to obtaining coverage for losses suffered as a result of government action due to COVID-19. Some policies may include language that outlines losses in business income during “periods of restoration” i.e., rebuilding after a fire or other natural disaster. The policy may include language that appears to limit coverage to events that include destruction or total loss of property. Some policy language may attempt to tie loss of business income and expenses caused by shutdown to other covered losses such as total loss of the physical structure.
Unfortunately, we anticipate many insurance carriers will deny business interruption claims in the weeks and months ahead. If you have a business interruption insurance claim denied by your insurance carrier, our team can help review your claim, your policy, and advise you as to your options.