Throughout the country, business owners are struggling with unpaid bills, furloughed staff, and an unpredictable future. The global pandemic has caused complete chaos to business operations, and to make matters worse, the insurance industry has universally denied coverage of business income and extra expense losses.
Insurers are denying business income and extra expense coverage based upon their unilateral determination that COVID-19 is an exclusion. In their denial letters, insurers are citing the need for a “direct physical loss” as a prerequisite to coverage. However, most insurance policies include a provision that coverage should apply where an order by a civil authority has led to the business interruption loss. And, a “direct physical loss” is not necessarily limited to physical damage or destruction on the property. If a business is prevented from using its commercial property for its intended use, a “direct physical loss” may stem from the inability to conduct normal business operations.
Coverage for business interruption may be provided as a separate extension on a business owner’s policy or as an inclusion in a commercial property policy. Despite paying a higher premium for this type of coverage, the severe losses sustained by the businesses, and the projected 800 billion dollars in reserves to cover high volume losses, insurers are denying all claims tangentially related to the pandemic.
In summary, local governments have forced businesses to either cease or limit operations in the name of public safety. As a result, business owners – who have paid thousands of dollars in insurance premiums to cover their losses – comply with the government orders and limit or cease operations. In the process of limiting operations, many business owners suffer a direct physical loss to their business or products. However, after making a claim with the insurance company, business owners are denied coverage, even in scenarios where a direct physical loss is contemplated. This practice causes immense financial distress to business owners and their employees.
In recent weeks, business owners and legal teams have teamed up to fight back against the insurance companies and their denial of coverage.
If your business was closed or limited in its operations, and your insurance policy provides for business income loss or extra expense cost, you may be eligible to recover damages in a business interruption claim. Pogust Millrood is a highly experienced law firm dedicated to representing its clients, and our primary goal is to obtain the full amount of coverage that you and your business deserve. We understand the incredibly difficult circumstances of shutting down or limiting your business, and the financial toll it takes on both you and your employees. We will thoroughly analyze and investigate your potential claim to determine whether you may be eligible to recover. Contact our firm today to schedule a free consultation.
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