As COVID-19 continues to spread, many businesses are feeling the impact in real time. State and local governments are ordering people to shelter in place, workers are being forced to work from home, furloughed or even let go entirely. Businesses are struggling to stay afloat and some are shutting their doors altogether. It is a scary and uncertain financial time, to say the least.
Many business owners carry “all perils” insurance policies or “business interruption” insurance which, in the event of a loss, would provide coverage for income that business would have earned had it been operating normally. These policies often provide coverage for business expenses such as employee wages, taxes, rent, licensing fees and other regular expenditures. These policies are essential to properly protect your business from unforeseen events and natural disasters (like earthquakes, hurricanes, tornadoes, vandalism and equipment damage) and should be purchased as part of any sound, comprehensive risk management program.
However, contrary to their title, these policies do not provide coverage for all perils, dangers or events. Like any insurance policy, business interruption policies are often littered with exclusions and conditions. For instance, business interruption insurance usually is only triggered by an actual, direct physical loss or damage to your commercial property. There are many specific exclusions for loss or damage caused by mold, mildew, fungus, or any other microorganism of any type, including but not limited to substances that pose an actual or potential threat to human health. This would of course potentially include the new Coronavirus. Under such a policy, in may fairly be argued that the virus pandemic did not physically impact your business, which was forced to close by the government and there is therefore no coverage.
In times like these, it is important to read your insurance policy carefully. If you have made a claim and feel that it was wrongfully denied by your carrier, contact the business litigation attorneys of Cutler Rader today for a free consultation. Additionally, just because one of your manufacturers, suppliers, trades or customers experiences a business interruption does not mean you need to also. Cutler Rader stands ready to assist with any commercial disputes, from breach of contract to collection matters. We handle most commercial matters on a contingency basis, meaning you only pay for results. No attorneys’ fees unless we make a successful recovery for you and your business. Call us today.