Is your Restaurant, Hotel or Bar closed or has it lost income due to Coronavirus?
Many business owners carry “all perils” insurance policies or “business interruption” insurance which, in the event of a loss, would provide coverage for income that business would have earned had it been operating normally. These policies often provide coverage for business expenses such as employee wages, taxes, rent, licensing fees and other regular expenditures. These policies are essential to properly protect your business from unforeseen events and natural disasters (like earthquakes, hurricanes, tornadoes, vandalism and equipment damage) and should be purchased as part of any sound, comprehensive risk management program.
Business interruption insurance coverage, just like any other insurance policy, is determined by the language in the policy itself. To determine whether losses caused by COVID 19 are covered the policy holder should review the policy including any definition of business insurance coverage which is included. Language related to the business interruption coverage will be found in either the property/casualty policy or a comprehensive package policy, likely added as an add on or rider.
However, contrary to their title, these policies do not provide coverage for all perils, dangers or events. Like any insurance policy, business interruption policies are often littered with exclusions and conditions.
Many insureds have heard the insurance companies’ latest mantra that:
- business losses suffered in connection with the recent responses to COVID-19 are not covered by policies with business interruption coverage;
- such losses are not caused by the type of physical damage required to file a successful claim; and
- exclusions for losses in connection with viruses are ironclad.
The mere fact that an insurer has denied a claim does not itself mean coverage doesn’t exist for Coronavirus related losses, in fact an initial denial of coverage may be a standard business practice. After the denial it will require an experienced insurance coverage attorney to review the policy and relevant facts. An attorney may need to determine for example whether the use of the word “loss” in a policy could trigger coverage due to a loss premises use. Our attorneys at the Winer Law Group have significant experience in the practice area of insurance coverage which is what will be required to determine whether an insurance policy with business interruption insurance will cover losses related to Coronavirus/COVID19.