Business Interruption insurance is a product that compensates your business in the event of an occurrence specified in the policy. The occurrences covered typically included things that prevent your entity or venture from doing business such as a fire, a disaster, or some other event outside of your control.  Business interruption insurance often promises to provide compensation for financial losses, often using business records to predict what your business would have earned if the event at issue had not occurred.

If your business interruption insurance was denied, you should review your policy documents to see what options you may have.  If the losses tied to your claim exceed one hundred thousand dollars ($100,000.00), we may be able to help you file a lawsuit in order to obtain relief or some remedy.

Many have already sued their carriers for declarations of coverage and improper refusal to honor their insurance contracts. Claims include bad faith, failure to investigate, failure to promptly pay claims, unfair settlement practices, breach of contract, and violations of various state insurance codes.

Many business interruption insurance claims have been denied recently based on the argument that there was no direct damage to the business which would trigger coverage under the policy. The rationale behind such a denial is that the recent pandemic for instance might be caused by a virus and there might not be a direct relation between the damage caused by a virus to third parties and the business that is seeking to file a claim under a policy. Such an argument might be harder to make if a storm destroyed a building housing the business. In the case of COVID-19, denials have been reported on the ground that the virus has not directly impacted the business in a manner that would require payment under the business interruption insurance policy. Situations have also been reported in which insurance companies deny coverage for business interruption even if the loss was because the government issued stay in place orders or ordered people not to go to work or school and those circumstances led to a loss of business.

Several insurance companies have stated that claims based on business losses incurred in connection with COVID-19 may not be covered and that policy documents should be consulted.

See also:

https://www.thehartford.com/coronavirus/businesses

https://www.travelers.com/about-travelers/covid-19-business-interruption

Your insurance policy documents will best give you an idea of whether your insurance policy covers interruptions caused by diseases, pandemics, or viruses.  Even if a policy includes pandemic coverage, it might not cover your current situation. In other cases, the policy may require a direct connection between the pandemic and the losses suffered by your business. It may not be enough to have insurance and losses.  The policy may require that you are directly affected in such a way as your building was contaminated or your employees were infected.

The New York State Department of Financial Service has a very useful FAQ on Business Interruption Insurance and coronavirus/COVID-19.