- May 11, 2020
- In news & Information
The coronavirus (COVID-19) has caused both state-mandated shutdowns and voluntary decisions for businesses to close their doors. To protect against these types of unforeseen disruptions, business owners purchase Business Interruption Insurance. However, insurance companies are doing everything they can to deny policyholders coverage under these claims.
The Law Offices of Samer Habbas & Associates is currently accepting Business Interruption Insurance cases. We have the knowledge, experience and resources to represent policyholders against their own insurance companies and hold them liable. If you have a business interruption insurance policy and your carrier is denying, delaying or underpaying your claim, you need to protect your legal rights. Please contact us to determine how we can help you.
Business Interruption Insurance Explained
Business owners are starting to explore the possibility of insurance coverage under the typical Business Owner Insurance policy as a result of their businesses closing during the COVID-19 pandemic. Business Interruption Insurance policies are individually tailored to the insured’s business. These types of policies cover loss of business resulting from necessary suspension of normal business operations.
The most common types of losses covered under Business Interruption Insurance include fire, wind, water pipe breaks and lightning. But with the outbreak of the coronavirus, business owners are looking to see if their coverage applies to loss of business by the COVID-19 pandemic.
Do I Have a Business Interruption Insurance Claim with COVID-19?
Although the measures mandated by state and local governments are important to safeguard public health, there is no doubt that these strategies are also hurting businesses. As a business owner who has paid years of insurance premiums, you may think you can easily turn to your insurance company for help. But most, if not all, business owners are sadly realizing that their commercial policy carriers are denying coverage of COVID-19 business interruptions.
As a business owner, your coverage of damages due to the coronavirus pandemic will come down to your insurer’s specific language policy and external conditions, and also whether the federal or state government ordered you to shut down operations. But you need to understand that even if you have Business Interruption Insurance coverage, you will still face obstacles in seeking the compensation that you deserve as a result of the COVID-19 pandemic.
The biggest obstacle starts with the language in the policy that limits this type of coverage to losses caused by “direct physical loss of or damage to property.” Insurance companies use this provision to argue that business closures related to COVID-19 did not suffer direct physical loss.
What Are the Boundaries of Business Loss Causes?
Most Business Interruption Insurance policies cover loss of profits that result from damage. This loss of business income typically covers:
- Losses resulting from damage to the business’s property.
- Losses resulting from damage to the business’s customers or suppliers.
- Losses resulting from a government order, like a hurricane evacuation.
- Losses resulting from damage to another property that attracts customers to the business, like a large grocery store in the shopping center.
Any event that must occur in order for an insurance liability policy, such as Business Interruption Insurance, to apply is commonly referred to as a “coverage trigger” in the insurance industry. In the case of property insurance losses, the event that triggers any of the above coverages is property damage. In order to determine whether your business has suffered “physical loss” under your policy, you need to take a close look at the specific facts of your situation and the particular language of your policy.
Some insurance companies use explicit language in their policies to exclude coverage for any damage caused by bacteria or viruses. However, there are some policies that only exclude coverage for losses caused by bacteria – not viruses such as COVID-19. These distinctions in the policy language make it imperative for business owners to consult with an experienced Los Angeles business interruption lawyer to carefully review their policy and determine whether they are entitled to coverage.
Civil Authority Closures May Trigger Coverage for Losses
Many insurance policies offer business income and extra expense coverage (business interruption) pursuant to “civil authority” provisions. This special coverage applies when an insured suffers lost income as a result of their property becoming inaccessible due to a civil authority order, such as California’s “shelter in place” order.
There are many court decisions that make a strong case that business losses sustained as a result of government-ordered business closures due to the COVID-19 pandemic will be covered by civil authority coverage – especially since the current shutdowns are directed at the specific businesses.
There is no doubt that many businesses are suffering serious losses caused by the COVID-19 pandemic. Insurance companies will take every step possible to avoid covering these types of losses. As a business owner who has paid year after year of insurance premiums, you expect to get coverage under your policy if you are unable to normally operate your business. Our business interruption attorneys will fight to make sure your insurance carrier is held up to their end of the bargain.
We Will Fight for Your Rights!
If you have property damage or business interruption insurance and you own or operate any of the following types of businesses and have been adversely impacted by the public closures resulting from the coronavirus pandemic, you need to immediately consult with an attorney to determine if you have coverage under your business interruption policy:
- Fitness Facility/Gym
- Healthcare Practice with elective procedures (cosmetic work, dental check-up, etc.)
- Entertainment Venue (Movie Theater, etc.)
- Beauty Salon (Hair, Nail, etc.)
- Convenience Store
- Or any other small business
Even if your insurance company has denied your claim or you have a “pandemic” or “viral” exception, our legal team may be able to help.
The legal team at the Law Offices of Samer Habbas & Associates is working hard to help business owners fight for their rights and get the compensation they deserve under their insurance policies for loss of business resulting from the COVID-19 outbreak.
Business Interruption by the Coronavirus Pandemic? Call us!
If you have any questions about your business regarding COVID-19 or to see how we can help, please call the Law Offices of Samer Habbas at 949-727-9300.