Business interruption insurance is one of the core coverages in a business owner’s policy, offering businesses a lifeline in the event of a disaster.
Business interruption insurance, also called business income insurance, helps cover bills and payroll in the event of a disaster that forces the business to temporarily close.
Business interruption insurance can cover profits, fixed costs such as rent or mortgage payments, moving expenses to a temporary location and other unforeseen expenses. Many policies contain civil authority coverages which means coverage is provided if a direct loss of revenue is caused when a government authority orders the closure of business, such as in the event of a curfew.
Whether a policy provides business interruption coverage for coronavirus shutdowns depends on the language of the policy and its exclusions.
Following viral outbreaks in the early 2000s, like SARS and MERS, the insurance industry added exclusions to their commercial property and business interruption insurance policies to preclude coverage for losses related to viral outbreaks.
Business Interruption coverage is designed to cover losses due to unforeseen circumstances out of the control of the business. This virus is a prime example of an event that may trigger this type of coverage.However, insurance companies are denying coverage for this type of claim. Obviously, the insurance contract language of each policy governs the coverages, but in many cases the insurance companies are denying coverage despite that the policy actually provides coverage. We are actively pursuing these cases already with our clients who received a denial communication from their insurance companies.
File your claim and if you get a written denial, Joel or I will be happy to talk to you about it.
Buckle up, drive safely, wash your hand and as always your referrals are appreciated!