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COVID-19 Business Interruption Claims

Legal Guidance From Experienced Attorneys in Alabama

The world economy has taken a significant hit as a result of the 2019 coronavirus disease (COVID-19) pandemic, but no one has felt this hit so severely as small businesses.

For those whose livelihood depends on open doors, mandatory closures could be ruinous. Still, smart business owners plan ahead and may have business interruption insurance to help them through disasters just like this one.

Unfortunately, the COVID-19 crisis is largely unprecedented, and your coverage may boil down to the language of your policy and whether or not you can prove coronavirus constitutes “physical loss or damage.”

Fortunately, our attorneys at Morris, Cary, Andrews, Talmadge & Driggers, LLCcan help you review your insurance documents and fight for any benefits you are entitled to.

Physical Loss or Damage

Many insurance policies cover interruptions caused by physical loss or damage. Although these companies usually have natural disasters like fires, floods, and hurricanes in mind, a business can be unusable without being physically destroyed.

For instance, if a business’ physical location is contaminated with coronavirus droplets, they cannot safely use it to serve customers or complete work-related tasks for anywhere from 4 hours to 3 days. Hosting customers and employees could further jeopardize the functionality of a business, as anyone can transmit the virus to workplace surfaces via a cough or sneeze.

According to the Centers for Disease Control and Prevention (CDC):

viable virus could be detected . . . up to 4 hours on copper, up to 24 hours on cardboard and up to 2-3 days on plastic and stainless steel.”

Put simpler, the presence of the virus is impossible to prevent without closure and could constitute a physical loss.

Inclusions, Exclusions, and Exceptions

Some policies may not have language that lends itself to viral physical loss or damage claims. Nevertheless, executive orders in many states prevent businesses from using their physical locations in and of themselves. “Acts of government” are sometimes addressed specifically in insurance policies.

Additionally, some policies mention viruses explicitly. Your policy may exclude or allow for claims related to infectious diseases. Ultimately, whether or not you are covered will come down to the wording of your policy.

Our attorneys will help you understand your policy, free of charge.

Insurance Bad Faith

Insurance Journal reveals that the insurance industry is expecting up to “30 million claims from small businesses that suffered coronavirus-related losses.”

Because insurance companies cannot honor all of these claims and make a profit, they will likely try to delay claims or deny them outright.

If your insurer denies your claim, they must provide you with a reasonable explanation. Further, they are not allowed to intentionally draw out claims or misinterpret the language of your policy.

With help from our firm, you can encourage your insurance company to take your claim seriously. If they refuse to do so, the courts may need to decide whether or not you are entitled to coverage.

Take Actionable Steps and Call Our Firm

Once again, this is an unprecedented time, and we do not claim to have all the answers. Still, there are some actionable steps you can take today.

At Morris, Cary, Andrews, Talmadge & Driggers, LLC, we encourage you to:

We look forward to discussing your policy with you and helping you file a claim if appropriate.

*For the most accurate and up-to-date information about coronavirus, please reference the CDC (hyperlinked above) or the World Health Organization(WHO).

**For news and resources in Atlanta, please consult the COVID-19 webpage from the Governor’s Office.

COVID-19 Business Interruption Claims