The COVID-19 coronavirus emergency has everyone scared, and many are imagining the worst. For business owners and managers, there is a fear that what you, your employees, and your customers or clients have built will be lost – through no fault of your own. And we don’t know how long the financial impact of the pandemic will continue.
Companies that purchased business interruption insurance before the outbreak may feel more relieved, knowing that the coverage will help restore what was lost. But if you now think that decision to obtain that policy will be a lifesaver, think again – the fine print may reveal you’re not covered for COVID-19-related losses at all.
Understanding Business Interruption Coverage
Businesses often obtain business interruption insurance as a piece of their first-party property insurance or as a standalone policy. Typically, several different types of coverage fall under the business interruption insurance classification:
- Business Interruption (BI) insurance, meant to compensate the insured for the income lost during the period of restoration or the time necessary to repair or restore damage to the covered property.
- Extended Business Interruption (EBI) for the income lost after the property is repaired but before the income returns to its pre-loss level.
- Contingent Business Interruption (CBI) for coverage for the insured’s loss of income resulting from damage to the property of others.
There are other types of Business Interruption insurance on the market. Certain policies also contain Civil Authority coverages.
BI Insurance Limitations and Exclusions for COVID-19
Every insurance policy has coverage limitations and conditions an insured must meet before benefits are paid. BI insurance policies are no different.
Exclusions describe a condition or type of loss not covered by the insurance policy. Limitations are also exceptions to the general statement of insurance coverage, but only under certain circumstances or for a specified period.
Some policies do cover human infectious or contagious disease. But because of the SARS epidemic, many insurers added exclusions to their policies to deny coverage for bacterial or viral infections. It is not yet known whether insurance companies will take a position that these exclusions will result in denial of coverage. There are at least four states which are considering a legislative ban to these exclusions as they relate to the current situation.
Do You Have A Question Whether Your BI Insurance Covers the Coronavirus?
The coronavirus pandemic is especially challenging because there has never been an event like it in modern history. The rapid outbreak threatens public health, and more non-essential businesses are forced to close each day, causing a rapid economic downturn.
Pandemic or no pandemic, insurance companies look to reject claims. They will try to shield themselves with any condition or limitation that saves them from having to pay benefits, especially expensive business interruption claims.
Talk to Our Team of Experienced Insurance Coverage Attorneys
The attorneys in Sommers Schwartz’s Complex Litigation Group focus on insurance coverage claims. Our team of accomplished lawyers has successfully litigated insurance denial actions, resulting in millions of dollars in benefits and compensation for businesses and individuals. We have experience in first-party and third-party insurance coverage litigation, and have been involved in cutting edge insurance coverage litigation over asbestos, pollution, and product liability claims.
We can help you navigate the coverage maze and get your benefits, hopefully without going to court. If necessary, we will file lawsuits to cut through insurance companies’ delay tactics, save your business, and get you back on track.
If your insurer is denying your business interruption insurance claim, contact us today. We remain open, working remotely and fighting for clients throughout the COVID-19 emergency.