The COVID-19 coronavirus pandemic has devastated the U.S. economy—particularly in the service and retail sectors. With significant losses being incurred daily with no end in sight, restaurants, hotels, and retail stores are looking to their business interruption insurance to cover their losses.
Business interruption insurance will either be an add-on to a commercial property insurance policy or a stand-alone policy. Business interruption insurance covers loss of income, contingent business interruptions, and possibly losses due to actions by civil authorities. It typically covers business losses directly or indirectly caused by a covered peril—lost profits, unavoidable fixed costs (such as rent, operating expenses, and other costs that continue to be incurred notwithstanding the coronavirus), cost of actions taken to mitigate business losses, and reasonable expenses to allow the business to continue operating.
Business Interruption Insurance Claims
Business interruption insurance provides coverage for the sustained loss of income due to your business being shut down. The shutdown generally must be caused by a covered cause that results in direct physical loss or damage to the property. Many mayors, county judges, and other local authorities have already declared that the Covid-19 coronavirus constitutes physical damage to property because of the length of time it can survive on hard and soft surfaces in restaurants and hotels, and the costs to properly clean such properties.
Contingent Business Interruption Insurance Claims
Contingent business interruption coverage covers business losses resulting from loss, damage, or destruction of property owned by a supplier or customer. For example, if the Covid-19 coronavirus shut down one of your suppliers and prevents it from providing products and services essential to your operation, you would be able to recover under your contingent business interruption insurance coverage.
Law or Civil Ordinance and Ingress or Egress Insurance Claims
Law or civil ordinance and ingress or egress insurance provides coverage for business interruption losses when a civil authority prohibits or impairs access to your premises. Depending on the specific policy language, such coverage may require that the access restriction results from a physical loss—such as the Covid-19 coronavirus.
In an attempt to slow the spread of the Covid-19 coronavirus, city, county, and state governments have issued sweeping orders requiring restaurants, hotels, and retail stores to close and those that are allowed to stay open to do so on a reduced capacity (such as restaurants open for take-out or delivery only). The orders also call for people to remain at home as much as possible, thus depriving businesses that remain open of their usual customers. Coverage for these types of losses are provided by law or civil ordinance and ingress or egress insurance.
Other Covid-19 Coronavirus Business Insurance Claims
There are numerous different types of insurance policies in the marketplace covering restaurants, hotels, and retail stores. Here are a few examples of other insurance coverages that could be triggered by the Covid-19 coronavirus:
- Crisis management insurance covers the expense of retaining public relations professionals or communicating with customers in general during a crisis, such as the coronavirus pandemic.
- Event cancellation insurance provides coverage for specific cancelled events, such as concerts, conventions and trade shows, and other cancelled events.
- Leader property insurance covers business losses if a nearby business that attracts customers to your business is damaged, suffers a loss, or shuts down—such as, for example, a restaurant or hotel located across the street from a major sports stadium.
- Pollution liability insurance provides coverage for costs to clean up pollutants—such as the Covid-19 coronavirus.
- Commercial property insurance provides coverage for properties that are physically contaminated, damaged, and uninhabitable or unfit for occupancy due to the coronavirus, including, for example, the cost to thoroughly sanitize the property. Indeed, many state and local orders shutting businesses specifically cite property damage from the coronavirus pandemic as an underlying reason for the shutdowns.
We represent our clients on a full contingency basis—meaning, we advance all litigation expenses and court costs. There is no up-front cost to you. And, if we are not successful at the end of the day, you will not owe us a dime. We don’t get paid unless you get paid.
If you need help with your business interruption insurance claim or if your carrier has denied your claim, contact us now. Prompt notice of your claim to your insurance company may be required to secure coverage.
Covid-19 coronavirus lost profits calculations are not simple and straightforward. They are nuanced and complex. We know what we’re doing. Let us go to work for you.
Representative cases:
Wilson v. Texas Windstorm Insurance Association; No. 09-CV-0421 (56th Judicial District Court, Galveston County, Texas) (2009) (Co-Lead Class Counsel) (combination class action and mass action on behalf of over 2000 property owners on Bolivar Peninsula whose homes were completely destroyed by Hurricane Ike; secured approximately $175 million of additional insurance benefits for Firm’s property owner clients).
Hendon v. Texas Windstorm Insurance Association; No. 1:09-CV-00920-RC (E.D. Tex. 2010) (Co-Lead Class Counsel) (class action on behalf of Bolivar Peninsula homeowners to secure refunds of prepaid windstorm and hail insurance premiums for structures that were destroyed or damaged by Hurricane Ike to the point of requiring demolition) (full refunds secured for Firm’s property owner clients).