Most small and medium-sized businesses carry some form of business interruption insurance. This includes coverage in the event of a natural disaster or fire.
If you’re like many business owners, business interruption is part of your overall comprehensive insurance or property/casualty policy. However, depending on the type of policy your business holds, coverage may be limited to certain types of disruptions and exclusions.
That’s where Jack Goodrich and Associates can help.
We’re experts at cutting through policy language to get at exactly what is covered, what is specifically excluded and what may be left for the courts to decide.
Coverages and Questions
So, what’s covered? That’s the question. Business interruption policies are targeted at helping businesses recover from physical damage due to circumstances like a storm, an earthquake or some other natural disaster. But more recently, courts have ruled to broaden what these policies cover.
If the coronavirus disrupts business, there may be no apparent physical damage. An owner may experience a slowdown, incur financial losses, see disruptions in the supply chain, or, in the case of many in our region, completely close due to the risk of infection and spread of the disease. At first glance, none of these would seem to be the result of physical damage and may not initiate a business interruption payout from a typical policy.
However, one question that has been raised is whether it’s possible to claim physical damage, even though it resides at a microscopic level. Employees, customers and the public may have touched or contaminated business-related surfaces, making them dangerous and causing physical damage. This may be a matter for the courts.
On another note, not all business income claims are the result of a direct loss. Contingent business interruption insurance provides protection against revenue-related losses due to a third-party supplier or distributor shutdown that directly impacts the ability to produce a product or service. Extending this, you could see coverage for hotels, restaurants and vendors in proximity of popular draws such as theme parks, sports venues or other attractions who would be impacted should those close for a period of time.
Policies, riders and coverages are many, and Pennsylvania courts have yet to rule on the coronavirus and its implications for many of these protections. That is why it is strongly recommended to have a professional consultation and a complete review of your insurances before making any assumptions or accepting any settlements.
COVID-19 is dramatically changing our lives, altering the business landscape and impacting the economy in far-reaching ways. Business interruption insurance is designed to mitigate that risk and assist with recovery.
The challenge is that insurance companies seek profits, not necessarily payouts. Claims filed may meet with fine print parameters, denial by exclusions and even offers far below damages. If you find yourself struggling to recover compensation for a business interruption claim, you should strongly consider seeking legal help.
If your business has been disrupted and you hold a business interruption policy, you may have a claim for compensation. Jack Goodrich and Associates is a nationally recognized law firm. We offer a no-cost policy review and personal consultation. Call 412-261-GOOD (412-261-4663).