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Business Interruption Insurance Claims Over COVID-19 Pandemic

closure sign for coronavirusThe COVID-19 pandemic has been absolutely devastating to the U.S. economy. Many businesses may be unable to reopen when restrictions are lifted without financial assistance. That is why many business owners are filing business interruption insurance claims.

Unfortunately, insurance companies may deny these claims, as business interruption insurance policies often only cover losses caused by physical damage to a business. Some policies even have exclusions for pandemics and viruses.

Below, learn more about these types of insurance claims and the compensation they may provide to business owners who are struggling to stay open because of the pandemic.

Are Coronavirus Losses Covered?

The answer to this question depends on many factors, particularly your insurance policy and coverages and exclusions listed in it.

Generally, business interruption insurance is meant to provide compensation for losses caused by physical damage to a business. Claims are often filed when a business is damaged by a natural disaster, like a mudslide, wildfire, earthquake or some other natural phenomena. If the damage prevents the business from continuing to operate, a business interruption insurance policy may provide compensation to help the business owner keep the business going.

One potential argument a lawyer might be able to make is that the coronavirus has caused physical damage to a business because customers could come in and contract the virus. Customers could also spread the virus around a store and potentially infect others. Fears about the coronavirus could prevent customers from coming to the businesses.

Your business interruption insurance policy may have exclusions for viruses and pandemics. Many insurance companies decided to put these exclusions in after the Severe Acute Respiratory Syndrome (SARS) outbreak back in 2003.

Some policies may have coverage for an order given by a civil authority, such as an order shutting down non-essential businesses or ordering people to stay at home.

Compensation for Business Interruption

Business interruption insurance may provide compensation to cover financial losses and expenses caused by a business being shut down. For example, the insurance policy may provide compensation for lost revenue and lost profits and expenses like rent or lease payments, property taxes, utility bills, mortgage payments and the cost to reopen or relocate the business.

Your insurance policy should explain how long these benefits will last. You could receive benefits anywhere from a few months to up to a year or more. Often, compensation is paid out for a certain amount of time after your business reopens.

What Can You do to Help Protect Your Claim?

One of the most important things you can do is to contact a lawyer right away, so he or she can help determine if you have a valid claim and file it before the deadline passes. If you miss the deadline, you may lose your chance to pursue compensation, no matter how financially devastating the economic shutdown has been.

You can continue to calculate your losses after you file the claim, but it is important to get the process started as soon as possible. Recovering compensation may take a while because insurance companies are being flooded with business interruption claims.

Another important step is to keep track of your financial losses and expenses over the course of the shutdown. That way your lawyer can estimate the full value of your claim and pursue maximum compensation to help keep your business alive.

Keep track of things like:

  • Utility bills
  • Invoices and purchase orders
  • Bank account statements
  • Extra expenses you have accrued during the shutdown
  • Documentation showing your revenue before the shutdown and during the same time period the year before

For a free case evaluation with Berry, Smith & Bartell, a Professional Law Corporation call 1-800-848-6288 today!

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