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COVID-19 Business Interruption Insurance Claims

Your business was your dream – and so much more. Making it a reality took hard work, sacrifice, and quite possibly a lot of risk. You poured countless hours into building your business from the ground up, and your success defied the odds. And then COVID-19 happened.

In the blink of an eye, everything you’ve worked so hard for was on the verge of collapse. After weeks of stay-at-home and shelter-in-place orders – and, in many states, still no clear reopening date – reopening may seem almost impossible. With no money coming in, you may have been forced to lay off the workers who count on you. Even paying rent and the utility bills for the empty building is more than you can afford right now.

COVID-19 Business Interruption Claims

Saying that your business was “interrupted” may be putting it mildly, but that’s the legal term used to describe this horrible situation. So, if your commercial insurance policy includes business interruption insurance – benefits that you have already paid a premium for – you’re turning to these policies for help.

But if you’re like many business owners across the country, you’re not finding help. All you’re getting from your insurer are stubborn and inexplicable claim denials. The insurance company can’t or won’t explain why COVID-19-related matters aren’t covered. The adjuster can’t show you the language in your policy that explicitly excludes this situation.

It’s time to stop wasting your breath arguing with insurance adjusters who talk in circles and refuse to listen. Your business is worth saving – and it’s worth hiring experienced, professional legal representation to fight for it.

  • Do I have a business interruption claim?

If you paid for business interruption insurance, you expected it to cover any interruption that was beyond your control – which COVID-19 is. Generally, if the coronavirus pandemic has closed your business, you have the right to at least file a claim with your insurance company. Find if you would qualify to file a business interruption claim.

  • What should I do if my insurance claim was denied?

The insurance industry is denying COVID-19 business interruption claims left and right. But a denial notice doesn’t have to be the end of it. A business interruption attorney can help you understand your rights and this complex situation. Find out how a lawyer can help you fight a denied claim.

  • How much will it cost to hire a business interruption lawyer?

We get it – your business is closed and struggling financially right now. That’s why it costs nothing to talk to an attorney about your legal options, and you owe nothing unless and until we get money for you. Find out more about no-win, no-fee legal representation for a COVID-19 business interruption claim.

After weeks of lock-downs in response to the deadly coronavirus, businesses are struggling. The impact has been especially devastating in the “non-essential” retail and service-oriented businesses that have been forced to close completely and for businesses that have had to scale back their hours and workforce, including restaurants and event venues.

A type of insurance called business interruption insurance could be a lifeline for those small and mid-sized businesses that are (barely) treading water. But just when commercial policyholders need help the most, their insurers are turning their backs, coldly and swiftly denying COVID-19 related business interruption claims.

A business interruption insurance policy is a contract. Just like any other contract, what’s covered and what’s not depends on the precise language of the policy.

But insurers aren’t taking the time to carefully review the business interruption wording of each individual contract. Instead, they’re summarily denying claims en masse, assuming that they’re off the hook for paying the benefits their policyholders have spent thousands of dollars just because the circumstance of the closures is unusual.  

As a result, what should have been typical business interruption insurance claims are now turning into lawsuits against the insurance companies that are ruthlessly denying claims.

Call us today to find out more about how we can help business owners get the money they need to stay afloat in the wake of COVID-19. 

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Understanding Business Interruption Insurance

Business interruption insurance is coverage you buy hoping you’ll never need to use it. So, for many small business owners, the coronavirus pandemic has necessitated a crash course in how this type of commercial insurance policy works.

Before you can fully understand your legal rights when an insurer denies your claim, you need to know the basics of business interruption insurance.

What Is Business Interruption Insurance?

Business interruption insurance definition: Business interruption insurance is a type of commercial insurance coverage that applies when the insured business is interrupted and suffers a loss of income as a result.

How does business interruption insurance work?

As with other types of insurance, if a covered event – interruption to your business – occurs, the policyholder files a claim for benefits with the insurance company.

Filing a claim usually requires the business owner to submit documentation, such as proof of payroll and other operating costs and of the amount of revenue the business would normally expect to bring in during the time of interruption.

Business Interruption Insurance 101

What constitutes a business interruption? And how does the COVID-19 crisis fit into business interruption insurance?

What Triggers Business Interruption Insurance

A business interruption insurance policy must contain language that speaks to what situations are and are not covered by the policy. Any long-term interruption of the business – more than a few days – may be the grounds for a claim, but some policies explicitly exclude certain events and scenarios.

Among the most common events to trigger business interruption insurance are fires and natural disasters, such as hurricanes and tornadoes.

Although business interruption claims most often stem from physical damage to the commercial property and its utilities, that’s not a hard and fast rule.

  • Some policies exclude certain kinds of natural disasters that cause physical damage, like earthquakes and floods.
  • Other policies cover business interruptions caused by these disasters, even if no physical damage occurred to the property.

Business Interruption Insurance & Coronavirus

How does a global viral pandemic and the resulting widespread economic shutdown work with business interruption insurance? Many insurers are taking the stance that it doesn’t – that business interruption insurance as a concept does not cover claims arising out of

But it’s easy to see how the insurance industry stands to benefit from denying any and all coronavirus business interruption claims. Insurers took thousands of dollars in premiums from policyholders, year after year. Now that those policyholders have seen devastating interruptions to their businesses, these companies want to hold onto the money.

The true answer to whether or not business interruption insurance covers COVID-19 claims is that it depends on the policy.

Very few individuals currently alive today have lived through a pandemic before – with the last one being the 1918 Spanish Flu pandemic that killed tens of millions of people – so this situation falls outside the realm of personal experience for all of us, including insurance adjusters and executives. Making blanket statements that viral pandemics aren’t covered regardless of what the policy says or doesn’t say isn’t acceptable.

If you’re getting pushback or denials of your business interruption claim but having trouble getting straight answers out of your insurance company, then it’s time to bring in COVID-19 lawsuit attorney.

An experienced lawyer can review your policy. We can help you understand whether the insurer has a valid contractual basis for denying your claim or whether you have the grounds to fight for the benefits you’ve purchased through insurance litigation.

Why Business Interruption Insurance Is Important

Did You Know…?

The average company employing fewer than 500 workers doesn’t even have a month’s worth of cash reserves, according to NPR. “Main Street” small businesses have just a couple weeks’ worth of cash reserves – and many have now been shut down for six weeks or more.

You’re not the face of some massive global corporation. You’re an entrepreneur, carving out a successful business with the same resources regular people are limited to: your own savings, business loans, and careful financial planning and decision-making.

Small and medium-sized businesses don’t have the enormous wealth of major corporations. In fact, many small businesses don’t even have a rainy day fund.

Small businesses rely on continued operations to keep paying their bills, much like individual workers do. COVID-19 has doubtlessly put a damper on those operations.

Some companies, like restaurants only preparing takeout orders, are still open but working on a scaled back basis. Their profits are down and they have been forced to cut hours or lay off staff. Others, like non-essential retailers and personal service providers, have closed completely, leaving their entire workforce unemployed.

For small businesses, getting your business interruption insurance benefits promptly means the difference between going under and making it to the end of this crisis.

You’re not being greedy or trying to pull one over on the insurance company. You’re just trying to keep it all together long enough that your business is still standing when all this is over.

You’re making sacrifices you never thought you’d need to make. You don’t want to lay off loyal employees, but if you don’t pay the rent, there might not be a job for them to come back to at all.

Did You Know…?

Many small business owners are already taking money from their personal savings and even retirement savings accounts just to get their companies through this crisis, ABC News reported – but as uncertainty continues to loom, even those drastic measures won’t be enough much longer.

For many small business owners, it’s a matter of finding any way to beat the clock – to outlast the coronavirus pandemic. And permanent closures are starting to seem inevitable if the business goes much longer without income.

The business interruption insurance you’re entitled to can save your company. It may be able to save the jobs of your employees and help provide for their families while the business remains closed.

Business interruption coverage is an important safety net in the best of times, but during the COVID-19 outbreak, these benefits – the ones insurers are adamantly and mercilessly denying – are more important than ever.

Business Interruption Insurance Terms Business Owners Need to Know

As you’re poring over your insurance policy or your notification that your claim has been denied, you’ll encounter some terms and phrases that aren’t used commonly outside of insurance contracts.

Here are some terms that can help you figure out what your policy says and the basis for the insurer’s denial – and, more importantly, what steps to take next.

Income, Expenses and More

Business income: Your policy should specify what it means when it refers to compensating you for lost “business income.”

Often, the term business income means the net income your business would otherwise have earned. Business interruption insurance usually also pays for the continuation of your regular operating expenses, including employee payroll.

Actual loss sustained: Business interruption insurance only covers your actual loss of revenue.

If your business was able to continue bringing in its normal business income during COVID-19, such as by offering takeout orders or curbside pickup of retail purchases, you wouldn’t be entitled to benefits even though your normal business operations were technically interrupted, because you did not sustain an actual loss of income.

Often, you can receive business interruption insurance benefits for a reduction in income that results from partial suspension of normal operations. A hair salon that has closed completely would be eligible for benefits that compensate it for loss of income during its closure. A restaurant that is seeing reduced business income due to being limited to takeout orders during limited hours would be eligible for compensation that bridges the gap between what the business made and what it would have expected to make.

Period of restoration: Insurance companies aren’t on the hook for replacing a company’s normal income indefinitely. Most policies limit the insurer’s responsibility to a period of restoration, or the time it takes to restore the business to its prior state.

Remember, business interruption insurance usually covers interruptions due to physical damage to the premises, so the period of restoration typically refers to how long it should reasonably take to get that damage repaired.

Extra expense: Sometimes a business owner must take steps to help mitigate any further damage. Although implementing these solutions cost the business money, they save the insurance company some money by reducing the amount of the claim.

Insurers will reimburse the policyholder for this “extra expense” as long as it reduces the cost of the claim by a reasonable amount. If you spent more on this fix than you actually saved the insurance company on the claim, you may not be reimbursed, or at least not fully reimbursed, for this extra expense.

Think of a company claiming business interruption benefits because of tornado damage. An extra expense in this example might be the cost of supplies to board up broken windows that prevents further damage from occurring to the property.

In the case of COVID-19 some possible extra expenses you might have include:

  • The price of protective gear for workers
  • Costs of additional cleaning and disinfecting of surfaces
  • The expenses of setting up delivery or curbside pickup stations

However, these extra expenses may be reimbursable only if they helped you continue operating in some capacity so that your actual business income loss sustained was lower.

Special Types of Business Interruption Insurance Coverage and Extensions

In addition to basic business interruption insurance, there are optional policy riders and provisions that expand coverage for business interruptions beyond the typical causes and periods of restoration.

Contingent business interruption coverage: To some degree, just about all businesses are part of a supply chain in some sense. The more your business relies on supplies to operate – such as retail stores that must have merchandise to sell and restaurants that require food ingredients to prepare dishes – the greater the amount of disruption you could face due to a problem with a supplier.

A contingent business interruption policy covers income you lose out on when a supplier with whom you have a direct business relationship is interrupted due to a covered event.

Leader property: A leader property refers to a nearby attraction that leads customers to your business. When a leader property is damaged or closed, it affects your business, too.

Some examples of leader properties include:

  • Amusement parks and entertainment venues
  • Malls and destination retail stores
  • Casinos

A leader property endorsement is a separate type of business interruption insurance policy that compensates your business for income lost due to a covered closure of a leader property. Given the extensive closures due to COVID-19, many companies that weren’t completely shuttered during the outbreak likely saw a loss of income because of the closures of other businesses.

Service interruption coverage: If utility services and other services are interrupted, that, too, can disrupt your business. Service interruption coverage applies when damage to or loss of a service is what stops your business from operating normally and bringing in its regular business income.

Extended business interruption coverage: Just because the immediate crisis is over doesn’t always mean it’s back to business as usual. Extended business interruption coverage usually covers any loss of income that occurs between the business’s restoration and its return to pre-loss level of income.

If it takes a little time to get back to your previous level of business income, this kind of insurance coverage can help your company get through the tough economic times.

Inclusions and Exclusions to Know for Business Interruption Insurance COVID-19 Claims

One of the things that makes it so challenging to advocate for your rights as a policyholder is the complicated language insurers use in crafting business interruption policies. Here are a couple of terms insurance companies may use to describe what’s included and what’s excluded from your policy.

Force Majeure: Some insurance companies don’t specifically exclude pandemics or government-ordered closures. However, they’re still trying to claim that the coronavirus triggers the force majeure clause, a clause that excludes them from covering claims arising out of unforeseen circumstances that are beyond their control.

Force majeure isn’t a free pass insurers can use to get out of paying claims like yours. In fact, bad faith insurance lawsuits and disputes have already been filed against insurance companies that have wrongfully tried to use this clause as an excuse not to cover legitimate business interruption claims.

Interruption by civil or military authority coverage: One type of business interruption insurance coverage that provides hope to small business owners is interruption by civil or military authority coverage.

Under this type of coverage, usually pertaining again to property damage, businesses can claim benefits when their loss of business income results from a government authority prohibiting access to the premises. Physical damage to the policyholder’s property isn’t always necessary for this type of coverage, which often applies if a disaster causing damage to an adjacent property is the reason for the government-ordered closure.

Did You Know…?

Some state governments, as well as the federal government, are considering legislation that would require insurance companies to pay COVID-19 business interruption claims even if the policy language excludes claims resulting from contagious viruses. Find out more about COVID-19 business interruption insurance legislation and your rights. 

Under a business interruption insurance policy that includes interruption by civil or military authority coverage, you may have the grounds to appeal an insurance company’s claim denial. Many of the claims resulting from COVID-19 are not due to the virus itself, but instead pertain to business interruption denial of access issues.

You need to have your individual contract reviewed by an experienced attorney. Otherwise, there’s no way for you to discern which of these terms or other legal and insurance industry concepts play a part in determining whether or not you have a business interruption and insurance claim or whether your insurer was legally justified in denying your claim. Precisely which coverages, clauses, and exclusions are stated in your policy – and how – may determine whether or not you get paid the business interruption benefits you deserve.

What Business Interruption Insurance Covers

Business interruption insurance covers many different types of expenses, including:

  • Lost revenue: The most obvious harm covered by business interruption insurance is lost business income. Insurers typically use your financial statements from previous months to determine the monetary amount of your lost profits – the money you would have made if the business had not been interrupted.
  • Mortgage, rent, or lease payments: Perhaps the biggest expense that remains when your business is interrupted is the property cost. While you may be able to cut down on supplies, inventory, utility costs, and employee hours, the cost of your business space stays just as high during a closure as it does during your best months. The mortgage, rent, or lease costs of your commercial property are among the expenses covered by your business interruption insurance benefits.
  • Utilities:Heating, cooling, electricity, phone, Internet – you can’t just cut off all utilities for your business, even during a closure. However, you can’t afford these ordinary operating costs when you don’t have your ordinary business coming in. Utilities is another one of the costs your policy may cover.
  • Payroll: You don’t have the money to keep paying workers with no customers coming in. One of the benefits of making a business interruption insurance claim is that your insurer can cover the cost of employee wages, so you don’t have to lay off your workers to make payroll.
  • Taxes: If you can’t pay your business taxes during the closure, you could face legal trouble and heavy financial penalties. A business interruption insurance claim can cover your tax payments now so you don’t incur these penalties later.
  • Loan payments: If you took out a loan to help grow your business, the coronavirus pandemic doesn’t excuse you from making your payments. Any documented loan payments can be covered by your business interruption insurance benefits.
  • Other fixed costs: Other operating expenses can also fit into your claim for business interruption insurance benefits.
  • Relocation and temporary location fees: If COVID-19 forced you to relocate your business or to set up a temporary business location, these costs could be part of your claim.
  • Advertising: Like it or not, keeping customers engaged during the closure and gaining them back after you reopen will likely require some additional marketing and advertising – an added cost just when you most need to keep business spending under control.
  • Commission and training costs: If you need new equipment due to the event that interrupts your business – which, though mostly applicable to disaster situations, may apply in certain COVID-19 situations – your policy may cover the costs of retraining workers to use this equipment.
  • Extra expenses: Those additional costs that are needed to keep part of your business running or otherwise mitigate your business income loss may also be compensable under your business interruption policy.

How Is Business Interruption Insurance Calculated?

At the risk of oversimplifying the situation, there is a basic formula for calculating the value of business interruption claims.

Net Income + Continuing Operating Expenses + Extra Expenses = Business Interruption Loss

In your operating expenses and extra expenses calculations, don’t forget to include often overlooked expenses such as:

  • Employee wages
  • State and federal tax payments
  • Your utility bills
  • The costs of any extra advertising you’re doing to reach customers

Calculating the value of your business insurance claim can be challenging, especially since you don’t yet know when business will get back to normal. Make sure you understand the terms of your policy and of any payment your insurance company may offer you. You don’t want to sign your rights away accepting a payment for only part of the business interruption only to find out later that you can no longer make a claim for the full value you deserve.

Filing a Business Interruption Insurance Claim

When you go to file your business interruption insurance claim, you will likely be asked to provide the following information:

  • A copy of your policy
  • The precise date of business closure or the date of the beginning of the COVID-19 impact on your business income and ability to operate
  • The reason why your business closed or was interrupted – for example, if a government mandate shut down non-essential businesses and prevented access or if you were forced by an executive order to scale back your operations
  • Any evidence that suggests that your business premises became contaminated with the virus that causes COVID-19
  • Documentation of your financial claims, including profit and loss statements for the period of the closure and the preceding months, payroll reports, and reports and receipts for any extra expenses

Even when business interruption claims occur outside of a pandemic situation, it takes a good deal of documentation to get benefits from your business interruption policy.

With many insurers shutting down COVID-19 business interruption claims automatically, without even hearing out their policyholders’ reasoning or examining the language of the policy, you may feel like making a claim is a waste of time. However, it’s important to promptly file your claim so that you are not in violation of any terms of the contract and, if the claim is denied, to be able to show an attorney what the insurer’s rationale for denial was.

Business Interruption Insurance Exclusions

An insurance policy should specify what circumstances and events are excluded from coverage. Generally, business interruption insurance contracts often exclude the following:

  • Short-term interruptions, like a typical power outage that lasts for a span of hours, rather than days. 
  • Property damage, in the sense of paying to fix the property or its contents (a separate property damage insurance policy would usually cover this cost)
  • Contingent business interruptions, if you don’t have a contingent business interruption rider or provision
  • Any types of extended business interruption coverage, if your policy does not include language stating that you have this coverage in the form of an add-on rider or endorsement
  • Certain extra expenses, especially if deemed not necessary for mitigating the harm of business interruption

Some policies will specifically exclude coverage of scaled-back operations, like a dine-in restaurant being restricted to preparing takeout meals only. Others exclude losses related to a contagious virus. More generally, business interruption insurance policies may exclude coverage for losses unrelated to the company’s commercial property insurance.

Under these exclusions, many insurance companies are taking the stance that they don’t have to cover COVID-19 claims, as they didn’t arise from a property damage issue.

However, not all business interruption policies have these express exclusions. Even those that do may not hold up against pending legislation that would require insurers to cover coronavirus-related business interruption claims.

Business Interruption Insurance Claims for Losses Due to COVID-19

The deadly coronavirus that has claimed hundreds of thousands of lives worldwide hasn’t shown any more mercy to small businesses than it has to those sickened with COVID-19.

A combination of factors directly related to the pandemic has threatened the very survival of small businesses (and even large corporations, for that matter). These factors include:

  • Consumer reluctance to go out in public for fear of coronavirus exposure
  • Reluctance of consumers to spend money due to job losses, pay cuts, global stock market downturns affecting investment savings, and drastic economic changes and uncertainty
  • Government shutdowns of businesses deemed nonessential
  • Government mandates to scale back operations, hours, and capacity for businesses permitted to remain open in a limited capacity

The coronavirus pandemic has interrupted businesses on a massive scale. So it’s no wonder small business owners are turning to the insurance policies they were promised would protect them in the event of a business interruption – policies that, after all, they’ve spent thousands of dollars on every single year.

Countless business owners have filed claims for the benefits that will keep them from having to shut their doors forever due to COVID-19. But most of these claims are being denied.

Some small business owners have been told that their claims would have been covered if they had evidence that someone infected with COVID-19 had entered the premises, according to BizTimes Media. That doesn’t help companies facing business interruption due to government shutdown orders.

Other companies are told that a virus exclusion in the policy means that, even if such evidence exists, it won’t help them.

Can a Lawyer Fight a COVID-19 Business Interruption Claim Denial?

Should you give up pursuing a coronavirus business interruption claim because your insurance company says your claim is denied? Not without speaking to an attorney first.

Here’s the thing: insurance companies are businesses first, not “neighbors” or “helping hands” or any of the other personas they try to portray in their advertising.

Their first priority isn’t you, but the bottom line – the profits they bring in for executive leadership and for their stakeholders. Insurance companies benefit from denying claims rather than paying them. So, in a complicated situation like COVID-19, they’re going to err on the side of denying claims rather than paying claims they could possibly get out of using contractual loopholes.

Did You Know…?

In an original survey we conducted, close to 30 percent of respondents reported feeling that they had been taken advantage of by an insurance company. Those respondents represented Americans across all age groups, genders, geographical regions, and income levels – not limited to accident victims, but encompassing the general public.

If you think your insurance company isn’t playing fair, you’re probably right.

The insurance company is hoping that you’ll give up fighting for benefits under the policy you’ve already paid for. If you do, they get to keep the premiums they’ve already collected from you without having to give anything back. The insurer wins when you:

  • Feel too exhausted to keep fighting
  • Buy into the myth that getting the help you need to win the claim will be too expensive
  • Run out of time to fight them before you have to close up shop permanently

But you didn’t get where you are by giving up easily.

Even without the pandemic, 20 percent of businesses fail in their first year, and 50 percent fail in the first five years. Yet you’ve lasted this long.

That’s not because of luck. It’s because you worked hard, kept at it, and refused to back down when things got tough. You probably also learned the value of surrounding yourself with the people and resources – like employees, suppliers, advisors, and funding sources – that you need to run your business the best that you possibly can.

Those same lessons that you used to build and grow your business can help you save it.

The numerous businesses affected by COVID-19 are fighting to make insurers uphold their end of their contracts. They’re doing this primarily through filing business interruption insurance COVID-19 lawsuits.

Thanks to policy elements that include coverage for the loss of ingress or egress, civil authority coverage, leader property coverage, and contingent business interruption coverage, business owners have a legal leg to stand on when they sue their insurers.

Shelter-in-place and stay-at-home government orders may be interpreted as a loss of access to the business, under ingress and egress provisions, or as covered under a civil authority provision.

There are also numerous other provisions that may be present in an individual business’s policy under which you could be eligible for coverage. It all depends on your business interruption policy wording. But your insurer isn’t going to share this secret with you.

COVID-19 Business Interruption Insurance Legislation

Insurance companies denying the claims of struggling small and mid-sized businesses – dooming many of them to permanent closures – is a particularly heinous offense during this pandemic.

In a time when tens of millions of Americans are out of work, letting these previously successful businesses fail, and their employees lose their jobs permanently, is unthinkable. Individuals who are able to do so are trying hard to continue supporting their local community businesses by buying gift cards and getting takeout from independent restaurants so that, when things get back to normal (or to a “new corona normal”), the favorite businesses that make their communities special are still standing.

The insurance industry’s refusal to do its part by upholding insurers’ contractual obligations isn’t only upsetting small business owners, but also their employees and the general public. The result has been calls for legislation to address this matter – in favor of the small businesses that are suffering.

Federal COVID-19 Business Interruption Insurance Legislation

At the federal level, the Business Interruption Insurance Coverage Act of 2020 was introduced in the House of Representatives on April 14, 2020 and has since been referred to the House Committee on Financial Services for review.

The bill aims “to make available insurance coverage for business interruption losses due to viral pandemics, forced closures of businesses, mandatory evacuations, and public safety power shut-offs, and for other purposes.” If passed, this legislation would strengthen the business interruption insurance COVID-19 lawsuits that are already pending nationwide.

State-Level Legislation for Business Interruption Insurance Denials

You may not have to wait for the federal government to pass its Business Interruption Insurance Coverage Act. Several states are working toward enacting their own legislation in response to the uproar caused by insurers’ denials of COVID-19 business interruption claims, including:

  • New Jersey
  • New York
  • Pennsylvania
  • Ohio
  • Massachusetts
  • Louisiana

New Jersey’s A. 3844 bill, introduced in the State Assembly on March 16, would be retroactive to March 9 – the day Governor Phil Murphy declared a State of Emergency and a Public Health Emergency in NJ.

In addition to requiring business interruption policies to cover claims arising out of the COVID-19 pandemic, this bill addresses the concerns about what paying coronavirus-related claims could do to the solvency of the insurance industry. Under this bill, insurance companies that pay these claims could “apply to the Commissioner of Banking and Insurance for relief and reimbursement from funds collected and made available for this purpose.”

New York’s Assembly Bill A10226B and Senate Bill S8211A have both been referred to their respective houses’ insurance committees and, if passed as currently written, would be retroactive to March 7, 2020.

In Pennsylvania, the issue was addressed in House Bill 2372, which was referred to the insurance committee on April 3. As currently written, this bill would apply to policies for small businesses that were in effect as of March 6, the day the Commonwealth of Pennsylvania issued a Proclamation of Disaster Emergency relating to the pandemic.

Ohio’s House Bill 589 was introduced to the state House on March 24 and would retroactively take effect as of March 9, when Executive Order 2020-01D declared a State of Emergency.

In Massachusetts, Bill S.2655 would ensure that “every policy of insurance insuring against loss or damage to property… which includes… the loss of use and occupancy and business interruption… shall be construed to include among the covered perils under such policy coverage for business interruption directly or indirectly resulting from the global pandemic known as COVID-19, including all mutated forms of the COVID-19 virus.” The bill goes even further, specifically prohibiting insurers from denying claims based on virus exclusions or exclusions of claims involving no property damage.

Louisiana’s SB477 bill was introduced in the State Senate on March 31, 2020. On May 4, the Senate read the bill a second time and referred it to the Committee on Insurance. A House version of the bill, HB858, was introduced, reread, and referred to the House Committee on Insurance on the same days as the State Senate bill.

Should You File a COVID-19 Bad Faith Insurance Lawsuit?

The novel coronavirus pandemic may be unprecedented, but this behavior on behalf of the insurance industry is, unfortunately, nothing new. Historically, insurers have often denied claims made during crisis situations – including massive natural disasters such as Hurricane Katrina. Policyholders have often been forced to file lawsuits against their insurers to get them to comply with awarding benefits.

Insurance Litigation: Your Legal Recourse for a Claim Denial

Commencing insurance litigation may sound like a drastic, and scary, step. Let our insurance litigation firm clarify what the lawsuit process entails.

In more ways than one, the coronavirus has hurt countless people. When certain companies – like an insurer denying reasonable claims – use the pandemic as an opportunity to inflict more harm by not living up to their responsibilities, a lawsuit is sometimes the only recourse you have.

  • You could appeal the claim, but as long as the same company is the one handling the appeal, denying the claim in the first place, and standing to profit by the denial, you’re unlikely to get anywhere.
  • You can file an official complaint with your state insurance department. This may prompt the state to investigate the matter. It may or may not result in getting you compensation.

When you pursue a lawsuit, the goal is to get you the benefits you’re entitled to, and you have experienced legal representation on your side to help make that goal a reality.

All across the country, small and mid-sized business owners in circumstances like yours are launching lawsuits against the insurance companies that are letting them down. And, as reports of COVID-19 business interruption claim denials continue to grow, so does the number of lawsuits.

Who can sue? Our coronavirus lawsuit attorneys may be able to help if you:

  • Are the owner of an established business
  • Had a business interruption insurance policy in place prior to the start of any emergency or public health declarations in your area
  • Had to shut down your business entirely or scale it back partially due to government-ordered closures or other direct results of the COVID-19 outbreak
  • Sustained actual business income losses compared to previous months
  • Have submitted a claim for benefits and had your claim denied or been warned that it is likely to be denied (or would like to get legal help with submitting a claim)

The lawsuit likely sounds more intense than it is.

  • Generally, once you reach out to our attorneys with the facts of your situation, we’ll investigate your policy and the information you have provided.
  • If you have the basis for what is likely to be a successful claim, we will start building a case for you against your insurer and will handle interactions with the insurance company on your behalf.
  • We file all of the legal paperwork and documentation and let you know when and in what capacity you are required to participate in the process.

Most claims don’t end in a huge courtroom drama like you see on TV. In fact, for plaintiffs who are represented by experienced attorneys, most of the lawsuit process is uneventful and largely invisible, as we’re working in the background without placing the burden of direct involvement on you. Whether we get you a settlement or take the case to trial, you will be kept in the loop throughout and able to make your own decisions, guided by advice based on our decades of legal experience.

Your policy is unique to your business. Although we can’t promise that you have the grounds for a case without looking at your policy, the facts of your claim, and the laws in your state, we can promise you a free consultation and the answers to your questions about your legal rights and options.

Industries Affected by Business Interruption Claim Denials

There’s no limit to the variety of companies that have been harmed by a COVID-19 related business interruption. Among the hardest-hit industries are:

  • Restaurants and bars
  • Hotels and lodging services
  • Entertainment venues and attractions
  • Retailers
  • Personal service businesses
  • Healthcare facilities
  • Building owners and landlords
  • Management companies

Representing Restaurant & Bar Owners in Business Interruption Claims

Did You Know…?

Between 5 and 7 million restaurant workers are expected to lose their jobs over a period of just three months as a result of the coronavirus pandemic, Business Insider reported.

It’s no surprise that restaurants are among the businesses that are most commonly leading the lawsuits against insurance companies for denying business interruption benefits. Profit margins for restaurants are often lower than for many other industries in the first place. When restaurants must scale back their operations by limiting their business to takeout and delivery orders, or close altogether, they quickly fall behind on paying their continuing operating expenses.

Local restaurants are part of the fabric of a community, and losing them hurts more than the business owner and the employees. Our business interruption attorneys stand with you as you fight for your business. Together, we can explore all of the legal options available to you.

The COVID-19 Impact on Hotels and Lodging Services

Although there’s never a “good time” for a global pandemic, the timing of the coronavirus outbreak in the United States was particularly devastating for the hotel industry and the larger travel and tourism industry. Countless spring break and senior class trips were cancelled. As the COVID-19 risk continues to loom, summer vacations are being postponed or cancelled, too.

Hotels that had been near full capacity now saw occupancy rates fall to below 20 percent, the American Hotel & Lodging Association (AHLA) reported. Many hotels must maintain occupancy rates at a minimum of 35 percent just to make enough money to continue operating. Every week that the coronavirus outbreak continues to devastate the tourism industry, the hotel industry loses $3.5 billion.

Did You Know…?

As many as 70 percent of hotel workers have been or are expected to be laid off, the AHLA reported. That’s almost 3.9 million American workers, who are losing a combined $2.4 billion in earnings every week that this crisis continues.

For hotel owners, your business interruption insurance benefits could help you keep your doors open in the short-term or at least make sure you can reopen after this pandemic passes. It may allow you to keep at least some of your workers on payroll during this time. The AHLA estimates that 33,000 small businesses in the hotel industry are facing immediate risk of permanently shutting down.

Can Entertainment Venues and Attractions Bounce Back From COVID-19?

The coronavirus and resulting closures are devastating for attractions that rely on bringing in crowds of people for face-to-face entertainment.

The overhead on these attractions is high, even if your employees aren’t working in their regular capacity. The large spaces mean large rent or mortgage costs and high utility costs. You may still need workers on-site to care for animals, keep machines and equipment in good condition, and keep the grounds from becoming overgrown.

While entertainment venues owned by massive international corporations can likely weather this storm, smaller businesses, like family-owned theme parks and theaters, are less able to get by. And there’s a good chance that it will take longer to get from the “starting to reopen” phase to the “business as usual” phase for these companies, since consumers may be reluctant to be among such big crowds and hesitant or unable to spend money on frivolous outings.

Coronavirus Business Interruption Lawsuits for Retail Stores

Outside of the stores deemed “essential” – generally, ones that sell groceries and medications – most retail stores are struggling in the wake of the COVID-19 outbreak.

Even larger retail chains are filing for bankruptcy and shutting down some locations permanently, but small, independently-owned businesses are the ones most at risk for losing everything. These businesses are also less likely to have the capabilities or expertise to switch to an e-commerce model that allows for online purchasing, and they don’t have the wealth of an internationally-known parent company backing them up.

If you’re the owner of a small retail business and your insurer isn’t paying up on your business interruption claim, please let us help. It’s hard enough to make it as a small business as it is. You shouldn’t lose everything you’ve worked for just because your insurance company wants to hold onto your money.

The Devastation of COVID-19 on Personal Service Businesses

Massage parlors, nail salons, hair salons, and more are suffering considerably from the loss of business due to the coronavirus outbreak.

You can’t exactly stay six feet apart from clients while giving them a massage, doing their nails, or cutting their hair. Even if social distancing is possible in the type of service your company provides, widespread government shutdown orders of “non-essential” businesses have kept many of these businesses closed for several weeks now. And, once this outbreak is over, many of your clients who are or have been out of work may not have the money to spend on non-essential services. Your business could be down indefinitely even after you reopen.

How Coronavirus Affects Non-Emergency Healthcare Facilities

The pandemic is a public health crisis, but it’s actually dealing economic damage to the healthcare sector, as well.

The point of trying to “flatten the curve” has been to avoid overwhelming hospitals, so that lives wouldn’t be needlessly lost because there weren’t enough ventilators, ICU beds, or skilled caretakers for the sickest COVID-19 patients. But without “elective” procedures and “business as usual” appointments, independently owned healthcare facilities and even hospitals that are treating coronavirus patients are struggling financially.

Did You Know…?

At a time when healthcare workers are severely needed to fight on the front lines of the battle against COVID-19, many doctors, nurses, and other health professionals are being laid off and furloughed due to the loss of expected income from non-urgent procedures, The Washington Post reported.

We’re seeing the health crisis turn into an economic crisis for small businesses in healthcare, including the private practices of:

  • Dermatologists
  • Dentists
  • Optometrists
  • Chiropractors
  • Surgeons
  • Primary care practitioners
  • Specialists outside of emergency and critical care medicine

If an insurer’s denial of your business interruption benefits claim is standing in the way of saving your practice, find out how we can help.

What Will a Business Interruption Attorney Do for You?

Why do you need a business interruption lawyer, anyway? You can gather the information you need and file a claim yourself, right?

In a perfect world, yes. A business interruption insurance claim usually isn’t the kind of matter that requires an attorney. But during this unprecedented pandemic, the insurance industry has taken the heartless stance of denying virtually all coronavirus claims, condemning their policyholders to shutting down their businesses for good and being forced to leave their workers jobless.

Denied business interruption attorneys handle the many responsibilities that go along with the lawsuit process. We work hard to make this process as easy as possible on you. Some of the tasks you can expect us to take on include:

  • Meticulously review the language of your business interruption insurance policy to support your claim with contractual arguments. Your policy is unique, so you need an experienced lawyer to see precisely what it does and does not cover.
  • Maintain a comprehensive file for your claim that includes documentation of every operating expense and your lost income, so you don’t have to worry about it. We’ll use this documentation to pursue the full amount of insurance benefits you are entitled to receive.
  • Manage all legal work and draft all legal documents  involved in pursuing individual and class action lawsuits against insurers who deny legitimate business interruption claims for COVID-19.
  • Handle every aspect of your claim and interactions with the insurance company, so you don’t have to.
  • Represent your interests from the time you retain our services to the completion of your claim, including in settlement negotiations or at trial.
  • Draw from our decades of legal experience to help you make informed decisions about your claim.
  • Make disbursement of the funds we recover for you easy and convenient, so you can focus on the future of your business instead of the logistics.

A business interruption insurance COVID-19 matter isn’t something to handle yourself. By denying countless claims, insurance companies have already shown that you can’t count on them to treat you fairly. It’s time to bring in a professional – an attorney with the skills and knowledge to tear apart each argument the insurer puts forth to avoid paying your claim.

Business Interruption Insurance FAQs

Understanding your insurance coverage is a challenge even during the best of times, but the stakes are even higher during this time of crisis. Here are some of the most frequently asked questions about business interruption insurance plans and COVID-19.

1 – Do I Have a Business Interruption Claim With COVID-19?

Maybe. If your business has a business interruption policy in effect and has lost income due to COVID-19, we encourage you to attempt to file a claim with your insurer.

There’s a good chance your insurance company will tell you that it is not covering claims arising out of the coronavirus. Although the insurer may state as a fact that COVID-19 claims are not covered, you should know that this is a complex situation with a lot of gray area.

There are many potential legal arguments that could be made in your favor, including arguments involving civil authority and loss of access. As legislation continues to evolve, this, too, can impact what will happen with claims like yours. Our COVID-19 business interruption lawyers are carefully watching what is happening with insurance legislation at this time.

If your insurance company denies your claim, your next step may be to reach out to an attorney who will pursue a coronavirus business interruption lawsuit on your behalf. Although you would need to speak with a legal professional to determine for sure whether or not you have a case, we encourage any business owner who believes they have the grounds for a lawsuit to take the next step and speak with an attorney about their situation. The consultation is free, so you really have nothing to lose by finding out your legal options.

2 – What Is Business Interruption vs. Business Income Insurance?

Policyholders should know that business income insurance is just a different name for the same kind of coverage as business interruption insurance.

Any business insurance policy that provides for coverage of business income may entitle you to benefits as a result of the economic consequences of COVID-19. Don’t worry so much about what the policy is called as about what it covers and excludes. If you’re having trouble understanding your policy or why your claim was denied, give us a call and let us help during a free consultation.

3 – Is Business Interruption a Property Coverage?

Business interruption insurance is not the same as commercial property insurance, but both types of coverage may be part of a larger commercial business insurance policy.

Generally, commercial property insurance covers the costs of repairing damage to the property. In the event of a fire or natural disaster, you might rely on your commercial property insurance to fix damaged roofs or broken windows or to replace machines and equipment that cannot be repaired.

Business interruption coverage instead covers the loss of your business income and your continuing operating costs. This type of coverage pays for the income you lost and the ongoing expenses during the time that your business cannot be open or cannot work at full capacity while the property damage is being repaired.

Generally, business interruption insurance coverage is not sold separately, only as an add-on to your commercial property damage policy or to a business insurance package, the Insurance Information Institute reported.

Many insurers are denying COVID-19 business interruption claims on the basis that the claim did not involve physical damage to the property. This contractual argument may or may not hold water, depending on the language of your policy and on whether the legislation that is pending across the country takes aim at this reason for denial.

If your insurer is trying to get out of paying your business interruption claim because no property damage occurred, it’s time to speak to an attorney about your options.

4 – Is Business Interruption Insurance Required? Is This Coverage Standard?

You are not legally required to obtain business interruption insurance, and it does not necessarily come standard with all business insurance policies.

Did You Know…?

Only about one-third of small businesses in the United States have business interruption insurance coverage, according to U.S. News & World Report.

Whether or not you want business interruption insurance is something you should discuss with your insurer at the time you purchase your policy, along with the terms of what your policy will cover.

If you don’t have business interruption insurance, then one way you can work toward saving your business is to look into grant and loan options being offered by federal and state governments and by private organizations. If you do have this coverage but your insurer isn’t honoring your policy, our COVID-19 business interruption lawyers may be able to help.

5 – When Does Business Interruption Insurance Start?

Most business interruption insurance policies don’t kick in immediately. Remember, these policies don’t cover short-term interruptions that last a matter of a few hours.

There is usually a business interruption waiting period – lasting 24 hours, 48 hours, or 72 hours, depending on the terms of your policy – before your business has been interrupted long enough to warrant a claim for benefits under the contract.

Of course, the coronavirus situation has harmed your business for more than a few days at this point. You should know that policies generally apply for the period of restoration, up to 12 months, after the event causing business interruption occurs. Again, this is general information, and the exact terms of your coverage may vary depending upon the language of your contract.

6 – How Much Is Business Interruption Insurance?

The cost of your business interruption insurance coverage can be as little as a few thousand dollars or as high as several thousand dollars per year.

Since many businesses have been paying their premiums without a business interruption claim for several years, there’s a good chance you spent thousands of dollars – possibly, many thousands of dollars – purchasing this coverage over the life of your business.

When determining the cost of your coverage, insurance companies take a lot of factors into consideration, including the likelihood of different types of events that could interrupt business and how significantly your business would be interrupted by a disaster.

As a result, businesses like restaurants, for whom the risk of a fire is greater and the ability to operate out of another space is reduced, tend to pay more than office-based businesses.

That’s one of the things that has most outraged business owners about this whole situation: they’ve been paying extra money for these benefits all along, but when the time comes that they need to use them, the insurance company is denying their claims.

You wouldn’t have thrown away your money on business interruption insurance coverage if you had known that, when your business income was interrupted, these years of premium payments wouldn’t help you.

Purchasing business interruption insurance coverage should have been a smart business decision, not something you regret. Although having to file a lawsuit just to get the benefits you’ve already purchased is no one’s first choice, having a denied business insurance litigation practice on your side through this can help make the years of premiums worth it.

Get Help From a COVID-19 Business Interruption Lawyer with No Upfront Cost

No Fee Promise - You Don't Pay Unless We WinIt’s wrong for the insurance company you trusted to be there for your business in times of crisis to bail on you right when you need them. Many business owners feel suddenly helpless – unable to get back to work, unable to keep making payroll and paying the bills, and unable to make yourself heard by the insurer who is denying your claim. Even if hiring a lawyer might help, filing a lawsuit sounds too expensive.

If you buy into the myth that hiring a lawyer is too expensive, you’re in good company. More than 50 percent of respondents who participated in our original survey said they would be reluctant to hire a lawyer when they needed one because of the cost. This common misconception is keeping individuals and business owners from getting the help they need when a legitimate legal matter arises.

What you probably don’t know is that it costs nothing upfront to file a lawsuit against your insurer. Attorneys for COVID-19 business interruption lawsuits are handling claims on a no-win, no-fee basis. Whether yours is an individual claim or a class action claim, your lawyer won’t ask you for money. Instead, attorneys’ fees are a fraction of what your lawyer gets for you – so if you don’t win your lawsuit, you pay nothing.

Every single day your insurance company keeps you waiting is costing you money. It’s time to stop trying to convince an industry that has turned its back on business owners to voluntarily do the right thing. If it takes a suit filed in a court of law to save your business and protect your workers, then we’re here for you every step of the way.

Business Interruption COVID-19 News

4/23/2020 – Fortune – The numerous restaurants suing insruance companies could be losing as much as $300 billion per month in combined revenue.

4/21/2020 – Reuters – The request to consolidate insurance litigation across the country has been submitted to the Judicial Panel on Multidistrict Litigation. If consolidated into multidistrict litigation (MDL), these claims would remain individual claims but be heard by the same judges who are familiar with the body of evidence – such as expert testimony on both epidemiology and legal contractual analysis – and the questions posed by the legal matter of COVID-19 business interruption claims.

4/20/2020 – Insurance Business America magazine – Business interruption class action lawsuits were filed against six insurance companies: Oregon Mutual Insurance, Society Insurance, Lloyd’s of London, Aspen American Insurance, Topa Insurance Company, and Auto-Owners Insurance.

4/20/2020 – Nation’s Restaurant News – Five more class action lawsuits against insurers who denied business interruption claims were filed on behalf of plaintiffs who own restaurants in Florida, Wisconsin, Minnesota, Ohio and Washington.

4/16/2020 – Chicago Tribune – Numerous Chicago-area businesses, including restaurants, bars, dental offices, movie theaters, and others have filed lawsuits against insurance companies that include Society Insurance and Cincinnati Insurance.

4/14/2020 – Property Casualty 360 – Factors like semantics of the policy language, jurisdictional understandings of what constitutes bad faith, and regulatory action in different locations will affect not just how COVID-19 business interruption claims play out but also the future of the insurance industry.

4/9/2020 – Business Insurance Magazine – South Carolina leglislators introduce S.B. 1188 to mandate coverage of coronavirus-related business interruption claims by amending existing state property insurance code.

4/9/2020 – Eater – Restaurants large and small have banded together to form the Business Interruption, an advocacy group for the industry in the wake of mass denials of COVID-19 claims. Celebrity chefs who are part of the group have used their clout to bring Presidential attention to the plight of the restaurant industry.

4/8/2020 – Insurance Journal – More than a dozen business owners sued insurers for denying coverage, many of them making the argument that civil authority clauses in the language of business interruption policies should apply in the case of coronavirus-related claims.