Was your business closed down or interrupted due to government orders, or from employees or customers being exposed to or diagnosed with Covid-19?
The U.S. department of labor estimates that forty percent of businesses do not reopen after suffering a disaster, and that twenty five percent of the ones that do reopen fail within two years. Most large and approximately forty percent of businesses carry business interruption insurance for times such as this. Business Interruption (BI) insurance is insurance that replaces income lost in the event that business is halted due to a loss or damage. The purpose of business interruption insurance is to do for the business what would have been done for itself. Business Interruption can happen because of multiple reasons such as fire, theft, or other natural disasters which can cause direct physical loss. When these losses occur, most BI policies will cover profits that would have been earned, fixed costs, a new temporary location, commission, training costs, and extra expenses. It would be beneficial to look at the monthly income, tax returns, contracts, leases, bills, and invoices from pre Covid-19 closures, and compare it to after. Your policy may cover most of these costs. Your policy may also cover extra expenses that you didn’t have before, such as extra gloves, masks, and extra cleaning supplies.
The question most business owners are facing now is will their business interruption insurance policy cover losses due to viruses, bacteria, or government ordered closures? The answer here unfortunately is not simple or always clear, it depends on the policy, and how the language of that policy is interpreted. There have already been more than four hundred and fifty lawsuits and dozens of class actions filed since the end of June, 2020. As you can imagine, regardless of the language in each policy, the insurers and the policyholders will be arguing over whether the virus should be covered or not. It is being left up to the interpretation of the courts and the state laws in each state to determine if these businesses will be able to collect on their policies.
What is clear is that there will be new legislation brought about because of this pandemic and the enormous losses that have occurred because of it. Over eight states including Louisiana have already introduced legislation that would require insurers to pay claims regardless of the policy language. If your business suffered a loss because of Covid-19, or any other disaster and your insurance company is denying your Business Interruption insurance claim, finding legal counsel to assist in reading and analyzing the language in the policy is highly recommended.
Business owners should request a full copy of their insurance policy and review it carefully. Your policy may have several options for recovery, filing a claim immediately is imperative if you have suffered a loss. Do not delay as there are strict guidelines in place for timely filing. Do not be persuaded that your Covid-19 losses will not be covered until first seeking out legal counsel to go over your specific policy and potential recovery. For immediate assistance, you may contact Thornhill Law Firm at (985)641-5010, toll free, (800) 989-2707, or by using the “Contact US” form on the website Thornhill Law Firm.