As Businesses Try to File Insurance Claims for Business Interruption, Denials Coming Rolling In
At this point, most business owners who have spoken to their insurance companies regarding business interruption coverage received negative feedback. Oftentimes, these insurance companies cite supposed exclusions in the commercial policy (e.g. exclusions for viruses, bacteria, pandemics, etc.) which they say absolutely precludes a business from recovering under their policy. Additionally, those submitting business interruption claims have seen their requests quickly denied by the insurance company for the same reasons. For most, such news is enough to discourage them from pursuing their loss of business income claim any further. This method of dissuading the insured from seeking an attorney and filing a claim is a blanket attempt by the insurance industry to avoid paying their loyal customers under a policy that they have paid a premium for over the course of many years.
Attorneys Begin Fighting on Behalf of Owed Business Owners
The reality is, due to the unique and unprecedented circumstances surrounding COVID-19, many provisions in the insurance contract that the insurance company alleges excludes coverage will be heavily litigated in the coming months. Attorneys have developed and continue to develop strategies for arguing to the courts why the suspected presence of COVID-19 on the insureds and neighboring business properties constitute a physical loss to the property. Additionally, we are prepared to argue that the insurance companies and brokers who are discouraging claims are relying upon inapplicable exclusions that cannot and do not apply to losses suffered from COVID-19.
It is believed throughout the industry that there will be billions, if not trillions, of claims to process in the coming months. Such claims will play a major role in assisting the restaurant, hospitality and entertainment industries across the country who continue to suffer extreme financial hardship as a direct result of COVID-19.
Insurance carriers across the country have mobilized to handle mass claims and are desperate to determine the best method of handling the same. Meanwhile, a number of state legislatures around the country have discussed taking legislative action that would compel insurance carriers to pay businesses for their business interruption claims.
President and Law Makers Begin to Chime in Business Interruption Claim Denials
During his April 10 news briefing, President Donald Trump suggested that insurers should pay some business interruption claims related to the coronavirus pandemic after a group of senators wrote to him to express concerns about various state lawmakers introducing bills seeking to mandate business interruption coverage for virus-related losses.
“You have people that have never asked for business-interruption insurance, and they’ve been paying a lot of money for a lot of years for the privilege of having it,” Trump said at the briefing. “And then when they finally need it, the insurance company says, ‘We’re not going to give it.’ We can’t let that happen.”
Understanding Your Business Interruption Insurance Policy is Critical
At this stage of the game it is imperative that business owners immediately locate and carefully read their respective insurance policies. Better yet, it is best that the same owners turn the policy over to an experienced attorney who is better equipped to navigate the intricacies inherent in commercial insurance policies.
The tricky substantive and procedural language in your policy will dictate your ability to file a successful claim against the carrier. When reading the policy, it is important to recognize that even though the policy contains coverage exclusions for things such as a virus or bacteria, it is very possible that business interruption coverage is triggered under a separate section of the policy, known as “civil authority” coverage.
To date, several high-profile businesses filed lawsuits against their insurance carrier seeking declarations that they that they are entitled to recover such losses resulting from COVID-19. Such lawsuits generally allege that a civil authority, meaning a state or local government official ordered their business to cease or impair daily operations in an attempt to control the spread of COVID-19, triggers their insurance policy. Using this provision, claimants argue that the closure or their business due to a covered loss, allows the insured to pursue a successful claim against the carrier.
Additionally, in policies that do not contain coverage for civil authority, claimants allege that the physical presence of the virus on the business premises, which is presumed due to the lack of testing capabilities and government actions, meets the criterion for physical loss necessary to trigger such coverage.
Business owners should not wait or count on legislation to decide their course of action. Instead, they should review their policies to determine if they may have coverage for losses stemming from COVID-19. Businesses, particularly those in the restaurant, hospitality and event industries, should review their policies to determine what coverage may be available. The language in your policy will ultimately determine what your business is entitled to under your policy.
Lastly, the insured must pursue this action in a time-sensitive manner. An insurance policy generally places a duty upon the insured to notify the carrier or such losses in a reasonable amount of time after the potential for such a claim has become known to them. Without quick action of the business owner, an insurance carrier may seek to deny your claim for failure to abide by a condition precedent, meaning that you failed to provide the contractual notice of such a loss to the carrier.
Experienced Attorneys Fighting for Local Businesses Suffering during COVID-19 Lockdowns
Despite insurance company’s attempts to discourage the filing of business interruption claims resulting from COVID-19, Dolman Law Group is aggressively pursuing claims on behalf of small businesses across the State of Florida. At Dolman Law Group, we will review your commercial insurance policy at no cost to you. Importantly, you will not pay us a penny unless we are able to recover from your insurer.
Dolman Law Group Accident Injury Lawyers, PA
800 North Belcher Road
Clearwater, FL 33765