The Coronavirus global pandemic has significantly impacted not only individuals throughout the world but businesses and their employees’ livelihoods. The United States pledges almost $1 trillion to bail out big businesses and banks, aiming to soften outcomes. However, this action will only help limited small businesses and won’t safeguard the future of everyday working Americans. With an uncertain timeline ahead for the economic impact, many businesses will experience interruption and may fail, resulting in an ever-growing unemployment rate, and a frightening time for those directly affected.
For businesses grappling with prolonged closures due to COVID-19, Premier Claims, a National Public Adjusting Firm, brings hope. We stand by policyholders, advocating for property and business insurance claims. While policies usually cover direct physical loss, extensions might also cover lost revenue during a business interruption. There may also be further coverage for business interruption based on a civil authority shutdown.
Business Interruption Coverage
This coverage typically allows for the recovery of lost income and associated extra expenses. This coverage requires the interruption resulting from direct physical loss or damage of the insured property caused by a covered peril. As many states mandate businesses too close, they are specifically referencing that this is being done, at least in part, due to the damage the virus is doing to the property. This is opening up the door to potential business interruption claims.
Civil Authority Coverage
This coverage is designed to apply when access to an insured’s property is hindered by a civil authority’s order due to physical damage. The damage must result from an insured peril affecting nearby property. This coverage also is opening the door to potential claims.
Whether or not you are going to have coverage is very dependent on your policy. Many policies have an exclusion of loss due to viruses or bacteria. These exclusions generally mean that the carrier will not pay for loss or damage caused or resulting from any virus, bacterium, or other microorganism that induces or is capable of inducing physical distress, illness, or disease. If your policy has this type of exclusion, then recovery under business interruption or civil authority will generally not be a possibility.
Across the nation, states propose bills for COVID-19 business interruption coverage, despite virus exclusion concerns. While questioning their constitutionality, the application of these coverages remains uncertain. The best thing you can do right now, is to review your insurance policies and see if coverage is available. If an exclusion does apply, then you should monitor some of these bills if applicable to your state.
During this time our firm will be conducting complimentary policy reviews and assessments to assist those affected by these business closures. In addition, Premier Claims is dedicated to reducing our fees in handling the claim in cases where coverage exists, and a claim can be filed. We’re here to let businesses and commercial property owners know that we are a resource.
Don’t lose hope. We’re here to help.
Written by Nick Andersen, General Counsel