The Coronavirus (COVID-19) has hindered the typical everyday routine of many individuals and businesses. The declaration of this global pandemic has resulted in economic fallout for countless industries. Turning to your insurance that may include coverage for business interruption and/or loss of business income may be the next step to take during this time of economic uncertainty.
Business interruption insurance coverage is meant to cover the loss of income and property suffered by a business due to a stop in operations. There is no doubt there will be an increase in claims under this coverage in the weeks to come. Whether these claims will be covered will depend on a few key factors- the terms and conditions of the insurance policy and the circumstances related to the presumptive loss.
The big question is: does a coronavirus-based operation halt allow for business interruption coverage by insurance?
It is important to understand all aspects of your insurance when faced with obstacles such as COVID-19. Typically, business interruption coverage will be included as part of a company’s commercial property insurance. It will apply when the policyholder experiences “direct physical loss or damage to” insured property.
Most commonly a business interruption claim will be used when a business is impacted by a fire or natural disaster. However, commercial property that becomes unfit or uninhabitable by other forms of disaster can sometimes qualify for coverage. A strong argument can be made that a business was unfit to operate due to the coronavirus.
Some other forms of business interruption coverage can apply when there is a disruption to a business’s suppliers. If the main supplier cannot provide a product for your business, then the policyholder may be able to recover from the loss.
Additionally, some policies extend coverage losses triggered by “communicable or infectious diseases” without involving physical damage to the insured property.
Whether or not your claim is payable will depend on how your policy’s terms and conditions are written as well as how it can be interpreted and whether or not courts in your jurisdiction have interpreted similar policy language. It is crucial that you keep detailed documentation of every way your business has been affected due to COVID-19.
If you feel your insurance company is not treating you fairly during this pandemic, we can help. Our attorneys at Fulmer Sill handle all types of insurance disputes and are dedicated to assisting clients with their insurance claims. Reach out today to get started with a free case evaluation.