Business Interruption Insurance Claims
Across the board, businesses are faced with potential economic disaster due to a loss of sales and net profit when a business interruption occurs as a result of the Covid-19 crisis. Business interruption insurance is designed to financially protect your company in the event of a “loss“ described in or allowed by your commercial liability insurance policy. The time for the start of the coverage may be dependent on a particular event or a disaster declaration from the federal or state government. Your insurance policy must be closely examined, as many commercial insurance policies contain broad exclusions for damages caused by biological agents. Others specifically provide coverage for damages caused by disease. Still other policies provide coverage for damages caused by disease, but provide sub-limits that effectively limit available coverage to certain dollar maximums. In addition, many commercial property insurance policies provide coverage for business income losses sustained when a “civil authority” prohibits or impairs access to the business. Depending upon its specific wording, “civil authority” coverage may or may not require that the access restriction result from “physical loss” by a covered cause of loss and, if so, often does not require that “physical loss” occur to the policyholder’s own property. Accordingly, in the event that a federal, state or local governmental authority limits access to or from areas where active transmission of an infectious disease has been identified, “civil authority” coverage may respond with insurance for the attendant income losses of affected businesses. This is no time for a lawyer to engage in a “learning curve” to assist a client. We encourage businesses who have suffered serious business disruption damages to have their policy reviewed by an expert team of attorneys to evaluate whether a coverage claim is viable, in light of state law on the subject.