We are in an unprecedented situation with the coronavirus pandemic. Entire sectors of the economy are either shut down or seeing a tremendous decline in business. Companies large and small are losing a lot of money and some may not be able to stay in business.
During this difficult time, compensation from a business interruption insurance policy may provide a lifeline to struggling businesses. However, even if you have such a policy, you may be wondering if it applies to something like the pandemic we are currently experiencing.
The experienced legal team at Schmidt Kramer are prepared to answer your questions about a business interruption insurance claim in a free, no-obligation consultation. If we validate your claim, we are prepared to help you pursue maximum compensation, based on the terms of your policy.
If your claim has already been denied or the insurance company is offering less compensation than you may be eligible to receive, we are prepared to help you pursue full compensation.
Free Consultation – Dial the 8’s. Ph: 717-888-8888.
Is COVID-19 Covered by Business Interruption Insurance?
Pennsylvania courts have not had a chance to rule on this issue and it is very unlikely your insurance policy lists global pandemics as a valid reason for filing a claim.
However, if you have an all-risk policy, and global viruses or pandemics are not specifically excluded, you may have a valid claim for compensation. These types of business interruption policies usually cover all losses and damages that are not specifically excluded.
Our attorneys would need to review your insurance policy to determine if the current crisis may be covered.
While these policies are often used to help businesses recover after suffering physical damage because of a natural disaster, courts have ruled to broaden what these policies cover.
However, insurance policies may require a direct relationship between physical losses or damage to a business and financial damages.
One possible way to counter this principle is by claiming the coronavirus is causing physical damage, even though it is microscopic and cannot be seen. Employees and customers could have coughed on or touched things in the store, essentially making these things dangerous and causing physical damage.
New Hampshire’s Supreme Court ruled in one case that an odor from a neighboring property caused a physical loss even though it could not be seen or touched. The court also said a physical loss must cause an alteration of the physical property that can be seen.
Another problem with proving the virus causes physical damage is that it is easy to clean and disinfect surfaces. If wiping a counter down with bleach is sufficient to eliminate the risk of people becoming infected, it may be difficult to obtain insurance compensation for losses.
Some insurance companies made changes to the languages of their policies to exclude coverage for viral outbreaks after paying out substantial settlements during the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003. These policies may say coverage for losses from pandemics are specifically excluded from coverage.
What Businesses Can Do to Protect Themselves
Due to the financial impact of damage caused by the coronavirus, there are certain things that businesses, especially those in the service industry, can do to protect their rights to coverage.
Expect that your property insurer will want proof of physical damage. The insurance company will try to argue that coronavirus does not result in physical or structural damage to insured property.
Do not make assumptions that your policy does not cover business losses. Insurers will say anything in an attempt to discourage policyholders from filing claims. This includes stating that a specific loss or event is not covered under the policy when it may in fact be. Insurers sell coverage for many different types of risks, including losses related to coronavirus.
It is important for policyholders to take immediate action to preserve their claims under property policies. This includes reviewing policies, saving documents and notifying the insurance company so it cannot argue a late notice.
Types of Damages That May be Covered
There are many types of damages that may be covered by a business interruption insurance policy, such as loss of income and revenue your business would have earned, operating expenses (rent, paying employees, etc.), phone bills, electric bills and other expenses that continue to accrue, despite your business being shut down or experiencing a serious slowdown or decrease in revenue.
Schedule a Free Consultation Today to Discuss a Business Interruption Claim
Insurance companies are in business to make money, not to provide maximum compensation every time a policyholder files a claim. They often cite fine print or other exclusions as reasons for claim denials, even if these may not be legitimate reasons to deny compensation for a claim.
If you are struggling to recover compensation for a business interruption claim, you should strongly consider seeking legal help. At Schmidt Kramer, we have been representing residents of Pennsylvania for more than 30 years and have a proven record of recovering compensation for our clients.
The consultation is free and there are no upfront fees for our services. Our attorneys are not paid unless our clients receive compensation.
Our phone lines are open 24/7 to take your call. Ph: 717-888-8888.