- April 21, 2020
- Posted by: Tim Adams
- Category: Insurance Claim
If your business was affected by COVID-19, meaning…
- You had to close your doors along with other “non-essential businesses” in your area
- You’ve had decreased profits due to the pandemic
… could you file a business interruption claim with your insurance?
The answer is … maybe. There are different kinds of coverage and exclusions. But even if you’re not directly covered, you might want to file anyway, and here’s why.
Type Of Coverage
Businesses usually have some form of insurance, but those policies do not always include business interruption coverage.
If your business has property insurance coverage exclusively, you may not have business income protection in a way that will help you cope with the effects of COVID-19. In this instance, “loss” refers to physical damage to your business structure, like in the case of a tornado, flooding, fire, etc. Temporary contamination of surfaces, like in the case of COVID-19, would likely not count as “physical damage.”
If you pay for special coverage that protects against business interruptions or disruptions outside of your control, you might have a right to file if the coverage isn’t exclusive to physical damage. That’s one reason getting expert help at reviewing your policy for all coverages is essential!
So, let’s say you have business interruption insurance. There are few additional things to know – including how exclusions can work against you.
The Virus / Bacteria Exclusion
Some Business Interruption policies explicitly exclude virus-related claims. If your policy has this provision, you would typically not be entitled to a claim. However, in the case of COVID-19, lawyers across the country argue that if your contract has a “Civil Authority” provision (the government told your business it had to close), you could have a right to file.
Going through your policy and searching for these is the only way to know what your chances are for a successful claim. If you need help deciphering your policy – we’re offering free policy reviews to those affected by COVID-19. Click here to request one now.
All Risk Vs. Named Peril Policy
Named peril policies specifically outline only what is covered by an insurance policy. All Risk insurance policies will cover the insured against all perils but also list things that are not included.
If you have an all-risk policy with no named virus exclusion, business interruption insurance may cover losses due to COVID-19. If you have a named peril policy that does not mention virus/bacteria as an exclusion, you may also be entitled to some benefits.
The biggest challenge policyholders face right now is how insurance carriers are interpreting coverage. If you are unsure of what your policy includes and excludes from coverages, it might be in your best interest to get expert help.
If you’ve already filed your claim and it was denied, the fight isn’t over! You still have a chance to receive benefits should the federal government declare that the insurance carriers must pay COVID -19 related claims. There is no precedent for this situation, so the government might create new legislation to protect business owners in the future – as they did post-9/11.
It’s essential to file now, even if you think it will be denied. Insurance companies are reporting the volume of COVID-19 related claims to the government. Should they pass a mandate, the claims filed first will have first access to available funds. Insurance companies do not currently have enough capital to pay out all claims; they will run out of funds to release. You want to make sure your claim is first in line to receive your benefits. Even if it is denied at first, it will be reopened in case of a federal mandate, and you’ll preserve your right to file plus the original date.
If you’re not sure what your policy does or doesn’t cover, we’d like to offer our help. Contact us for a free policy review. At the very least, you’ll walk away with a better understanding of how your premiums protect you. Best case scenario, you can file for a chance at benefits. Contact us to get started.