Business Interruption Claims Due to COVID-19
For businesses of all types, the COVID-19 Pandemic has directly resulted in disruptions ranging from challenging to catastrophic, across the nation. This July study from the PNAS (Proceedings of the National Academy of Sciences) addressed the economic impact of COVID on small businesses. The results underscore the significant disparity in risk faced by small businesses when a major business interruption—in this case, the pandemic—occurs. According to this study, organizations with fewer than 20 employees were 73% more likely to have experienced an interruption prior to the study than larger (100+) firms. Small firms experienced a steeper decline in headcount with 40% unemployment compared to pre-crisis levels. Finally, the study reports that nearly half of all small businesses had cash on hand totaling less than two months operating expenses. While impact and outlook vary across industries, regions and size of organizations, this study demonstrates clearly the disproportionate and existential risk posed to small business by forced closures.
Claims of business interruption have spiked as business owners face civil closures and other challenges resulting from the coronavirus. Inundated with these claims of lost income, insurance companies are increasingly relying on delay tactics and denials to maintain their own profits. You likely pay thousands of dollars in premiums each and every year for this protection. If you are a Florida business owner who has suffered business income loss as a result of the COVID-19 pandemic, you absolutely require a tenacious legal team to advocate and, where necessary, litigate on your behalf. We encourage you to schedule a consultation with the experienced business interruption attorneys at Rosenberg Law, P.A. We will examine your insurance policy, assess and document income loss as well as other damages to your operations, and ensure you recover the insurance payments to which you are entitled.
Is COVID-19 Covered By your Business or Commercial Insurance?
Many commercial insurance policies include business interruption or business income coverage within the policy form while others may require a specific endorsement. While general descriptions of the business interruption coverage may remain somewhat consistent across policies, innumerable business owners are shocked to receive denials of their claims. A legal professional experienced in business interruption claims and business interruption disputes can assess your current coverage prior to or after receipt of a denial of a claim and help you overcome payment delays or litigate unreasonable denials.
According to the American Action Forum, in 2002 and 2003, the SARS outbreak led to millions of business interruption claims paid by insurers—in one instance, the Mandarin Oriental International hotel chains received $16 million. It should be noted, however, that even the successful court challenges failed to establish reinterpretation of “physical damage” and that following the SARS outbreak many insurance companies added specific viral exclusion clauses to their business interruption coverage policies.
COVID-19, and the resulting forced closure of businesses by civil authority, has once more brought this issue to the forefront. In April 2020, President Trump noted that he expected to see insurers pay business interruption claims unless they had a viral exclusion clause in place. The same day these expectations were voiced, President Trump received a letter from seven Republican senators on behalf of insurers that “pointed to the enormous legal and economic challenges…” of requiring the broader interpretation of coverages.
Preliminary analysis by the University of Pennsylvania Law School as cited here in Insurance Journal, “judges have dismissed more than four times as many business-interruption lawsuits as they’ve allowed to proceed,” thus far this year. So—will your current business or commercial insurance policy cover your business interruption losses as they pertain to coronavirus and forced closures? In the absence of state legislation requiring business interruption coverage to include coronavirus and/or viral outbreak, successful litigation of denials will require deeply experienced legal counsel. Rosenberg Law, P.A. attorneys have more than 50 years of combined experience in successfully defending the rights of small business owners.
What are Your Chances of Success for Filing a Business Interruption Claim Due to COVID-19?
Early decisions regarding business interruption claims due to COVID-19 have tended to favor insurance companies, although there have been some notable exceptions. According to The National Law Review, several restaurants in North Carolina filed COVID-19 business interruption claims, and the court rejected the argument by the insurer that a virus does not cause physical loss or damage.
More recently, a Florida court denied a motion by an insurance company to dismiss a pandemic related business interruption claim, ruling that the language in that particular policy was simply too ambiguous. Courts in both Dallas and Philadelphia have likewise denied motions brought by insurance companies to dismiss cases of business income loss due to the coronavirus. While litigating denials of business interruptions claims due to Covid-19 is increasingly daunting, many business owners have partnered with strategic, experienced legal counsel to save their business from closure, protect their livelihood and preserve the jobs they have created.
How Can Rosenberg Law, P.A. Help?
If you have received or anticipate receiving a denial of business interruption coverage due to COVID-19—contact Rosenberg Law, P.A. We will carefully review your claim and craft a strategy to obtain the benefits to which you are entitled. If your successful claim has yet to be paid by your insurance company, contact us today. Our corporate attorneys have more than 50 years of combined experience and with offices in Sarasota and Plantation, Rosenberg Law, P.A. is committed to protecting the rights of Florida business owners.
The attorneys at Rosenberg Law, P.A., are equipped to help you with business interruption insurance claim disputes.
Do NOT let the insurance companies make or break your business.