As a result of the COVID-19 “Safer at Home” Orders and forced non-essential business closures, many companies have suffered significant losses of business income over the past month. While the SBA and private banks are running out of cash to assist small business owners, many owners have turned to their commercial insurance carriers for help. For owners with Business Interruption Insurance, they are hoping to replace this lost income to help cover ongoing expenses. Business interruption insurance, also known as business income insurance, is supposed to help your business pay bills, replace income and cover payroll expenses when your business is forced to close temporarily. But does it apply to a closure based on State mandated quarantine closures?
Immediately after the Federal Government and the State of Florida began to issue guidelines for non-essential business closures, our firm received the following statement from The Hartford regarding Business Interruption Claims:
“Business Interruption Coverage will cover losses that result from direct physical loss to property. Generally, a virus doesn’t cause physical loss to property, but every situation will be looked into on a case-by-case basis. We encourage you to review your specific policy language.”
We believe that this is a precursor statement to blanket coverage denials being issued to policy holders attempting to make a loss of business income claim. In addition to the non-essential businesses that sustained losses during forced closure, we anticipate businesses labeled as “essential” that were able to remain open, yet operated at minimum or negative profit margins, will also be denied business interruption coverage.
If you are a business owner that has had your Business Interruption Insurance Claim denied you have legal rights that we can help you pursue. In addition to the right to file a lawsuit or force an arbitration of your insurance claim, you may also be able to recover attorneys’ fees and costs from your carrier. Many times, the individual language in your particular policy will provide insight into how best to combat a wrongful insurance claim denial. For a free evaluation of your business insurance policy, contact us today at (904) 358-3300 to speak with one of our experienced insurance claim denial lawyers.