When a catastrophic event, including a global pandemic, forces your business to shut its doors, you could be facing weeks or months of economic losses and uncertainty. Not only can you lose steady income from regular customers but also customer loyalty and goodwill and incur additional costs related to the business closure.
If your commercial property insurance includes coverage for business interruption, you might think you can breathe a sigh of relief. Unfortunately, many companies find that they receive pushback from insurance companies or encounter unnecessary obstacles when filing a claim.
The attorneys at Reeves & Mestayer, PLLC have extensive experience dealing with all types of insurance claims. If you need to file a business interruption claim, want to ensure you receive the benefits you need and deserve, or have had your claim denied, we can help. Contact our office today for a free consultation.
Loss of Business Due to COVID-19
The coronavirus pandemic has resulted in the infliction of severe damage nationwide. Lives have been lost, and the economic fallout is expected to continue for several years. Except for businesses that are considered “essential,” commerce has ground to a halt in some areas. The resulting financial losses for some business owners will be tough to recover from without payments from commercial insurance and other sources.
Depending on the specifics of your policy, you may or may not qualify for coverage from your insurer.
Civil Authority Coverage
Shelter-in-place or stay-at-home orders have forced many businesses to temporarily close their doors across the nation. When business owners are forced to suspend operations to comply with a government order, they are acting in response to civil authority. If your insurance policy includes civil authority coverage, you may have a valid business interruption claim.
Virus Exclusion Clauses
Following the SARS outbreak in the early 2000s, many insurance companies added virus exclusions to their commercial insurance policies. Based on this exclusion, a lot of COVID-related business interruption claims are being denied.
But some insurance policies don’t mention pandemics, and others include a special endorsement designed to provide this coverage. It’s important to understand the full scope of your coverage before giving up on a claim.
Special Event Coverage
Many large events, such as conventions, concerts, and sporting events, have either been postponed or canceled due to COVID-19. There is often a virus exclusion with event cancellation coverage, but not every policy is the same. Some policies contain an endorsement providing coverage if a nearby destination or event that drives revenue has closed.
What is Covered by Business Interruption Insurance?
Business Interruption Insurance (BII) is generally part of a commercial insurance package, and it is coverage for a business’s lost income and other costs following an emergency, disaster, or other covered loss. Most BII plans cover more than lost income. Some of the things they typically cover include:
- Profits – profit reimbursements are based on the business’s earnings prior to the interruption.
- Wages – coverage helps to pay business owner and staff wages during the shutdown.
- Fixed costs – fixed costs include rent and contracts with suppliers.
- Taxes – businesses might be forced to continue making tax payments during a shutdown.
- Loan payments – BII can help with ongoing loan payments.
- Additional expenses – additional expenses include the cost of temporary relocation or machinery.
Types of Business Interruption Coverage and Exclusions
Insurance coverage can be complicated, and many of these clauses and terms are meant to cause confusion among policyholders. A few of the most common types of business interruption coverages include:
- Extended Business Interruption Coverage – Most policies provide coverage until damages property is restored, but extended coverage will continue to pay until a business returns to pre-income levels.
- Contingent Business Interruption Coverage – If a business relies on suppliers or other businesses to operate, this type of policy will provide coverage if disruptions occur.
Many policies also include exclusions, telling you what they “won’t” cover. Some typical exclusions include:
- Cause of closure not covered, meaning there must be a covered peril
- Partial closure losses, meaning the business must completely close
- No payment for utilities with the understanding that these should be turned off temporarily if the business is closed
- Undocumented income won’t be covered
- No payment unless there was also property that was physically damaged
Was Your Business Interruption Claim Delayed, Denied, or Underpaid?
If your business had to close its doors after a disaster, emergency, or government mandate, you can file a business interruption claim by contacting your insurance company or agent. Gather all of your business records to support your claim and take any necessary steps to mitigate further damages.
If your insurance company denies your claim, that doesn’t mean it isn’t valid and that you don’t deserve compensation. Some insurance companies are entirely dedicated to protecting their bottom-line results and do so at the expense of policyholders. If you have a covered loss under BII and the insurance company has denied your claim or is underpaying you, you have the right to pursue a bad faith or breach of contract case against them.
Unfortunately, not every business interruption claim will result in fair treatment from the insurance company that you’ve trusted with your business. If you were denied compensation or are dissatisfied with how your BII claim has been handled, an experienced business interruption attorney can protect your rights.
Our skilled business attorneys utilize quality insurance coverage experts and investigators to determine the true value of your business interruption claim. This allows us to build the strongest possible case for you and help you navigate any obstacles that keep you from re-opening your business.
Speak With an Experienced Business Interruption Attorney
At Reeves & Mestayer, PLLC, our attorneys work hard daily to build a strong case against insurance companies on behalf of our business clients. We understand that deciphering insurance policy jargon and thinking about suing an insurer can be intimidating, but we are dedicated to aggressively defending your interests.
Contact our office today for a straightforward evaluation of your situation. We’ll honestly tell you what we believe we can accomplish and will work towards the best possible outcome for you and your business. Call 1-855-558-2977 or contact us online to schedule an appointment.