According to the Insurance Information Institute (III), business interruption insurance generally covers:
- The fixed costs that most businesses have and often need to pay—even during a business interruption, and even at a reduced rate (electricity, water, payroll, and benefits for employees).
- Income that your business forfeits during the period of reduced business.
- Any additional expenses that arise because of the interruption to your business, such as the cost of relocation or a switch to digital sales streams.
Most business interruption policies specify the events in which this sort of coverage is provided, and generally such events are:
- Flooding due to natural disasters or other rare weather events
- A lightning strike that causes significant damage
- A fire
- Damage caused by wind
- Other forms of physical property damage
- Theft of essential business-related property
What is unclear is the utility of business interruption insurance in the face of the COVID-19 (novel coronavirus)-related economic slowdown (or shutdown).
You May Be Fighting for Your Business’ Life Right Now
Business owners throughout the United States—including Florida—are facing unprecedented uncertainty about economic policy and how it will impact the short- and long-term future of their business operations.
The mandate from the Office of the Governor that only essential businesses remain open in Florida has:
- Caused business owners—and small business owners in particular—to make difficult decisions, some of which may cause them to lose valuable employees.
- Left countless businesses with an unsustainable level of revenue, or without any revenue at all.
- Created widespread uncertainty about the availability of financial relief, and what exactly such forms of relief will cover—if anything.
- Put the existence of many businesses in doubt.
As a result of revenue streams drying up, many business owners have had to:
- Fire most or all of their employees.
- Rely on personal finances to keep their business alive.
- Become delinquent with their business-related creditors.
- Attempt to take on loans, either personal or from the U.S. Small Business Administration (SBA). (A crash in the SBA’s loan application system (as affirmed by Politico reporting), and unclear loan application guidelines, has made this process difficult or impossible for many.)
- Salvage whatever revenue they can by operating their business in a way that complies with the current mandates.
If you are one of many small business owners that has felt the strain of coronavirus-related measures and mandates, you may be running out of patience and options for keeping your business open.
One possible avenue to financial relief for your business that you may have explored is business interruption insurance.
Business Interruption Insurance for Coronavirus-Related Losses Is Still Developing
Many business owners have some sort of business interruption insurance as part of either their business owner’s policy (BOP) or their property and casualty insurance policy. Yet while some business owners have some measure of business interruption insurance, it is not always clear what is covered by business interruption insurance.
In general, natural disasters and other forms of unanticipated property damage are covered. Depending on the language in your policy, a stoppage caused by a virus may or may not be covered—as many business owners have already discovered.
Even if you have specific language in your business interruption insurance clause that precludes you from coverage in the case of contamination or bacteria—or even a virus specifically—you do not have to take “no” for an answer. In fact, for many business owners, taking “no” for an answer is not an option.
A Lawyer Can Assist You in Fighting for Business Interruption Compensation
The circumstances surrounding the current economic slowdown are unprecedented in several ways. The mandate that businesses shut down—for Floridians and Americans alike—is the first of its kind because of its:
- Scope
- Indefinite nature
- Potentially devastating effect on the small business owner class
Such issues mean that normal circumstances may not necessarily apply, even in the case of clear wording in an insurance policy. If your insurance policy is unclear on what is covered by business interruption insurance in circumstances such as these, a lawyer may be able to help. They may also help by:
- Analyzing the language in your insurance policy to specifically view what is and is not covered.
- Consulting experts in the insurance and legal fields to identify any language in your policy that may entitle you to coverage under the business interruption clause of your policy.
- Reaching out to your insurance company to file a claim if you have not already, or contest the denial of any claim you have already filed.
- Taking your denied claim to court if necessary.
Your business (and so much more) could be on the line if you are unable to secure financial coverage. Do not hesitate to ask for help from a lawyer who will fight for you and your business.
Call Our Team at The Landau Law Group Today
These are uncertain—and for many small business owners, defining—times. Our team wants to help our fellow Floridians make it through this time so that they can continue to thrive once normal business operations resume.
Call our team at The Landau Law Group today at (866) 703-4878 for a free consultation regarding your business interruption insurance (or any other matters) that we may be able to assist you with.
