Does your business have an insurance policy? The part that says if your business is interrupted, you will be covered for your loss? Were you told by your local government to close your doors until further notice? And when you called your insurance broker, did you learn that your insurer won’t cover your claim? And worse, that unknown to you, your policy has a “virus” exclusion?
Business Interruption Insurance Coverage
Typical business property insurance policies – whether for restaurant, retail, professional services, manufacturing, dental offices, medical practices, and hundreds of thousands of other business – include a provision that covers your loss of business income caused by a covered loss that results in a slowdown or suspension of activities. Like those caused by the COVID-19 coronavirus outbreak.
Your policy typically offers coverage for losses suffered during the time required to repair or replace damaged property. Many policies provide for business income coverage with an extra expense coverage, and they extend coverage up to a defined policy limit for the net income you would have earned and your continuing normal operating expenses.
How Courts Interpret Business Insurance Policies
In past years, courts often found coverage under similar or identical language when the damage to your business operation was caused by things that could not be seen: smoke, gas, smell, bacteria. Courts agreed with policyholders that business operations interrupted by government orders were also covered. Very few insurance companies took the position that when a state or federal government told you not to operate that “loss of use” of your business wasn’t covered.
Insurers Are Excluding Losses from the Coronavirus
Today, it is becoming clear that every insurer in the United States is taking the position that it will not honor its business interruption insurance. The stance is contrary to rules in every state requiring that:
- Coverage must be interpreted broadly to afford the policyholder the greatest possible protection;
- Exclusions in your policy must be construed narrowly in favor of coverage; and
- It is the burden of the insurance company to show a claim is specifically
Now more than ever, your insurance company may be acting in its best interest, not yours.
Speak with an Experienced Insurance Coverage Attorney
The attorneys at Sommers Schwartz have been fielding calls from business owners who are finding themselves with a ruinous loss and no coverage. We intend to protect their policyholder rights.
If you have a question about your policy wording, contact us to examine your insurance policy. We are working remotely and can give you clear advice about whether your insurer is taking advantage of this extraordinary time to deny a legitimate claim. The consultation is free, and there is no fee unless we recover compensation for you.