The COVID-19 pandemic has changed the way America does business and will continue to do so. While some essential industries are operating at severely reduced capacities, others have had to close their doors entirely. Worse, as the pandemic continues to pick up speed here in the United States, the end of the current recession and the financial crisis it has imposed on businesses of all sizes could be several months away.
Business Interruption Insurance
After forced closures began, many business owners turned to their business interruption insurance policies in hopes of recouping at least a portion of the losses incurred. In theory, a situation like the current crisis is exactly why business interruption insurance policies exist – they are intended to provide the insured compensation for losses incurred during a period of business interruption due to a disaster. Depending on the policy, business interruption insurance can even replace income lost after the business reopens and until it returns to pre-disaster stability.
Unfortunately, many business owners filing business interruption claims in the wake of pandemic closings are discovering that disease due to virus or bacteria is excluded from the disaster definition attached from the policy. As a result, none of the losses due to COVID-19 closure are eligible for recovery. Others have seen claims rejected because the businesses closed due to civic order and not because the virus itself damaged the location.
What Should You Do?
According to those within the insurance industry, many insurance companies wrote virus and disease exclusions into business interruption policies after the SARS outbreaks of 2011. In addition, some of the same companies wrote policies in a way that specifies that the physical building housing a company must incur damage as the result of the disaster in order for business interruption insurance claims to pay out. In general, insurance agents suggest affected business owners seek the assistance provided by federal relief.
If you currently pay business interruption insurance premiums, carefully examine your policy to determine your coverage during the pandemic. In general, the insurance company will require reports of net income, regular expenses and extraneous expenses, but it is important to consider utility costs, payroll, and a full spectrum of factors as well – contact a trusted attorney to help you perform a thorough inspection of your reports before you make a claim.
Alternatively, if your insurance company has already denied your claim, speak with an attorney immediately to determine the legitimacy of the denial.
Gallon, Takacs & Boissoneault, Co, LPA has been assisting Ohio and Michigan residents in recovering insurance compensation since 1955. If you have questions regarding your business interruption insurance or experienced a claim denial due to the current crisis, contact us today for a free consultation. We can help you determine your access to compensation during these trying times.