Do You Have a COVID-19 Business Interruption Insurance Claim?
Most business insurance policies include coverage for lost earnings due to government shutdowns. This coverage is typically called “Business Interruption” and “Civil Authority” coverage.
Business Interruption Insurance Claim Attorney
During this difficult time, The Greenwald Law Firm is offering a no-risk review of business interruption insurance policies for businesses that have been closed during the COVID-19 pandemic.
While social distancing measures and forced business closures may be important to preserve the public health, there is no doubt that these strategies devastated businesses, both large and small.
If you are a business owner, you may believe that turning to your insurance provider for help will start your solution. Your commercial insurance policy should have business interruption coverage that insures you specifically for times like these. However, business interruption coverage is a complicated and vastly uncharted area of insurance law for most. Understanding the language of your particular insurance policy will be the first step in the process of getting your business back to normal.
What is Covered by Business Interruption Insurance?
Business interruption insurance is one that provides coverage for businesses in the short-term, typically when an outside event negatively impacts your profitability.
Like other insurance policies, the road to receiving what you’re owed, back to recovery isn’t as cut and dry as we’d like.
Unfortunately, even with business interruption coverage, owners face challenges getting the compensation they deserve, after suffering losses. One of the most common challenges for most begins with a policy language that limits its coverage to losses caused by “direct physical loss of or damage to property”. Some insurance adjusters may argue that business closures related to COVID-19 did not suffer direct physical damage.
Does Business Interruption Insurance Cover COVID-19 Losses?
Business interruption insurance policies, almost across the board, will only provide financial relieve if the loss is caused by a covered peril. This is where the Corona Virus makes this a little more difficult. Business owners have suffered losses, not only due to the pandemic, but also to the government mandated shutdowns, across the country.
Some courts hold business losses caused by a threatened loss–whether this is flood, fire, etc–are not physical losses. So, in some cases, you may not have business interruption coverage unless you can prove that your business was closed due to COVID-19 contamination, even though you were mandated by the government to shut down.
On the other hand, other courts have ruled that business losses caused by pandemics or diseases, such as E. coli, are in fact direct losses, and are thus covered under the business interruption insurance policy.
It’s important to remember that courts across the United States have not yet settled on a uniform rule for when insured property has suffered during a pandemic. The determination of whether your business suffered a physical loss , under your policy, will require a close examination of the facts surrounding your case.
Civil Authority Closures
Additionally, your insurance policy may also have “civil authority” coverage. This is a special coverage for lost business income when your business is closed by order of a government entity. Since the mandates were directed at specific business types, having this in your policy will make a strong case for fair compensation.
How is a Business Interruption Claim Calculated?
The business interruption claim is compiled by comparing the actual turnover earned during the “interruption”, with the same time frame of the preceding calendar period. Any losses that arise are then adjusted for trends and then reduced by the money saved because the business was not operational, at that time.
The final number will be the amount that you’ll claim under business interruption.
How Do I Write a Business Interruption Claim?
Business interruption losses are among the most confusing types of claims for insurance. Here are a few things you can do ahead of time. This may or may not help you in the current, but it will certainly help moving forward.
- List accurate rate-able business interruption values. Don’t go off of the worksheet provided by the insurance company.
- Calculate your maximum foreseeable loss and probable maximum loss measurements
- Analyze contingent risks
- Take note of business interruptions vs extra expenses
- Compare your gross earnings, gross profit, and business income statements. Although these are certainly similar, using one over the other may be beneficial for some businesses.
- Ask for help when you’re unsure
Business Interruption Insurance Attorney, Joseph Greenwald, Jr. Can Help
Across the United States, businesses suffer staggering losses caused by COVID-19. Insurance companies will try every excuse to avoid covering these losses. When you, as a business owner, purchase business interruption insurance, you expect to be protected in times like these, when you need it. Every year, businesses pay in to protect themselves in the off chance that they are unable to continue normal operations, for a limited period of time.
These businesses deserve advocates with the skill and resources to fight for their rights and make sure insurance companies hold up their end of the bargain.
Greenwald Law Firm LLC has experience representing clients across Louisiana for almost 20 years. If you have questions regarding business interruption insurance claims or would like to schedule a consultation, please contact our office at 318-219-7867.