COVID-19 and Business Interruption Insurance

Depending on the policy, the current COVID-19 public health emergency and associated damages may give rise to business interruption coverage. This coverage is typically purchased by businesses as part of their property insurance policies in the form of a rider, endorsement, or optional additional coverage. The Mobile, Alabama personal injury attorneys of Tobias & Comer Law, LLC are experienced in handling denied claims and negotiating with insurance companies.

Business interruption losses may also be covered as an add-on to a company’s umbrella insurance. Business interruption coverage is designed to protect companies from losses due to unavoidable interruptions in their daily business operations. Many businesses have been paying premiums for business interruption coverage for years, only to see the claims denied in the wake of the current crisis, and it is anticipated more claims will be brought and denied in the future. If you have a claim that has been denied, call Tobias & Comer Law, LLC for a free consultation. We are personal injury lawyers in the Mobile area with extensive experience with insurance claims.

By way of example, the owner of a restaurant and movie theater in Texas recently sued Lloyd’s of London, contending the insurer will deny the restaurant’s insurance claim for lost business. The restaurant’s insurance policy included a pandemic event endorsement which defined a pandemic as “the announcement by a public health authority that a specific covered location is being closed as a result of an epidemic….” The case is still pending. Source: SCGM, Inc. v. Certain Underwriters at Lloyd’s, 2020 WL 1683973 (S.D.Texas April 3, 2020)(Plaintiff’s Original Complaint).

In addition to business interruption coverage, some insurance policies contain civil authority coverage, which is triggered when Federal or State or Municipal Authorities deny access to an area in which a business is located. Civil authority coverage could be triggered by the quarantine orders many of us are currently operating under today. For example, a restaurant in Washington, D.C. filed suit against its insurance company, contending that the Mayor’s order suspending all restaurant operations triggered coverage under the civil authority provision in its insurance policy. The insurance company continues to deny the claim, contending in part the restaurant did not suffer an actual physical loss. The lawsuit asks the court to order the insurance company to pay the claim. The case is still pending. Source: “Shuttered DC Restaurant Says Insurer Breached Policy by Denying Coronavirus Claims,” 2020 WL 1861029 (April 14, 2020).

In addition to the issues directly related to business interruption insurance claims, it is important to stay attuned to the more general provisions in the insurance policy that must be satisfied for coverage to apply. First and foremost, businesses need to make sure premiums are paid to avoid any gaps in coverage. Second, businesses should take particular care to comply with notice of claim requirements in the insurance policy, which are often strict in the context of business interruption claims. Third, businesses should maintain complete records of any losses in a manner consistent with their ordinary course of business. Fourth, businesses should carefully review the claims filing procedure and demand confirmation from the insurance company that all needed documentation necessary to file a business interruption claim has been submitted. Finally, businesses should consider expanding their existing insurance coverage to more specifically address losses from health emergencies such as the one we are all facing today.

If you have a business interruption claim, or your business interruption claim has been denied by your insurance company, the lawyers at Tobias & Comer Law, LLC stand ready to assist you and advocate your interests. We offer free video or phone consultations so you can speak with us from the safety and convenience of your home.  Call us today to schedule an appointment. 251-432-5001.

Tobias & Comer Law, LLC are a Mobile, Alabama-based personal injury law firm. Desi Tobias & Bryan Comer, a partnership with over 50 years of experience helping people. Connect with us.