Business Interruption Insurance

Business interruption lawsuits seek to recover lost income for businesses denied business interruption insurance coverage related to COVID-19 closures. 

Beasley Allen Law Firm is handling business interruption lawsuits for businesses that were denied business interruption insurance claims related to mandated closures to stop the spread of COVID-19. Dee Miles, Head of our Consumer Fraud Section, Rachel Boyd and Paul Evans are spearheading this litigation for our firm. They would like to talk to you about any potential claims.

Does business interruption insurance cover COVID-19?


Businesses crippled by the government-mandated shutdown issued to slow the spread of the highly contagious coronavirus that causes COVID-19 filed business interruption claims with their insurers for money to pay bills, replace lost income, and cover payroll. However, many are being told that the one disaster their policy does not cover is temporary closure due to a pandemic.

What is business interruption insurance?


Business interruption insurance, sometimes called business income insurance, is one of the core coverages in a business owner’s policy, offering businesses a lifeline in the event of a disaster.

A business owners policy typically includes three or four core coverages:

  • Commercial property insurance provides coverage for building, equipment and inventory.
  • General liability insurance helps cover any medical expenses or bodily injury.
  • Crime insurance protects against fraud, theft or forgery.
  • Business interruption insurance, also called business income insurance, helps cover bills and payroll in the event of a disaster that forces the business to temporarily close.

What is covered by business interruption insurance?


Business interruption insurance can cover the following:

  • Profits that would have been earned, based on prior months’ financial statements.
  • Fixed costs like operating expenses, based on historical costs.
  • Moving expenses if the business must be moved to a temporary location.
  • Commission and training costs for operators of machinery replaced by the insurer.
  • Reimbursement for reasonable expenses beyond fixed costs.
  • Civil authority ingress/egress, meaning coverage is provided if direct loss of revenue is caused when a government authority orders the closure of business, such as in the event of a curfew.

For example, if a fire breaks out in a restaurant, commercial property insurance will pay to replace inventory damaged in the fire as well as any damage to the building. Business interruption insurance, on the other hand, helps pay bills, replace lost income, and cover payroll while the restaurant is temporarily closed for those repairs. Other events covered by business interruption insurance include wind, hail, vandalism or damage to your building or equipment. However, damage caused by flood, earthquakes, or broken glass are typically not covered.

How is business interruption insurance calculated?


A community’s water supply can become contaminated by nearby industries and result in toxic exposure. As a result, state and municipal water systems are left struggling with costly upgrades to water filtration systems, while residents in their community are unable to drink their tap water for fear of water contamination. Beasley Allen works to hold the companies that pollute the water system responsible for paying for the cleanup. In 2003, our firm helped bring a $700 million verdict for PCB contamination for more than 20,000 current and former residents of Calhoun County, Alabama—the largest private environmental settlement in U.S. history at the time. In addition to filing claims for individuals, our firm also represents state and municipal governments in litigation of this type.

Does business interruption insurance cover COVID-19?


Business interruption insurance can cover the following:

  • Profits that would have been earned, based on prior months’ financial statements.
  • Fixed costs like operating expenses, based on historical costs.
  • Moving expenses if the business must be moved to a temporary location.
  • Commission and training costs for operators of machinery replaced by the insurer.
  • Reimbursement for reasonable expenses beyond fixed costs.
  • Civil authority ingress/egress, meaning coverage is provided if direct loss of revenue is caused when a government authority orders the closure of business, such as in the event of a curfew.

For example, if a fire breaks out in a restaurant, commercial property insurance will pay to replace inventory damaged in the fire as well as any damage to the building. Business interruption insurance, on the other hand, helps pay bills, replace lost income, and cover payroll while the restaurant is temporarily closed for those repairs. Other events covered by business interruption insurance include wind, hail, vandalism or damage to your building or equipment. However, damage caused by flood, earthquakes, or broken glass are typically not covered.

Congress urges insurance industry to cover COVID-19 business interruption claims


A community’s water supply can become contaminated by nearby industries and result in toxic exposure. As a result, state and municipal water systems are left struggling with costly upgrades to water filtration systems, while residents in their community are unable to drink their tap water for fear of water contamination. Beasley Allen works to hold the companies that pollute the water system responsible for paying for the cleanup. In 2003, our firm helped bring a $700 million verdict for PCB contamination for more than 20,000 current and former residents of Calhoun County, Alabama—the largest private environmental settlement in U.S. history at the time. In addition to filing claims for individuals, our firm also represents state and municipal governments in litigation of this type.

Business interruption lawsuits


Business interruption insurance can cover the following:

  • Profits that would have been earned, based on prior months’ financial statements.
  • Fixed costs like operating expenses, based on historical costs.
  • Moving expenses if the business must be moved to a temporary location.
  • Commission and training costs for operators of machinery replaced by the insurer.
  • Reimbursement for reasonable expenses beyond fixed costs.
  • Civil authority ingress/egress, meaning coverage is provided if direct loss of revenue is caused when a government authority orders the closure of business, such as in the event of a curfew.

For example, if a fire breaks out in a restaurant, commercial property insurance will pay to replace inventory damaged in the fire as well as any damage to the building. Business interruption insurance, on the other hand, helps pay bills, replace lost income, and cover payroll while the restaurant is temporarily closed for those repairs. Other events covered by business interruption insurance include wind, hail, vandalism or damage to your building or equipment. However, damage caused by flood, earthquakes, or broken glass are typically not covered.

States crack down on insurance industry over COVID-19 business interruption insurance claims


Business interruption insurance can cover the following:

  • Profits that would have been earned, based on prior months’ financial statements.
  • Fixed costs like operating expenses, based on historical costs.
  • Moving expenses if the business must be moved to a temporary location.
  • Commission and training costs for operators of machinery replaced by the insurer.
  • Reimbursement for reasonable expenses beyond fixed costs.
  • Civil authority ingress/egress, meaning coverage is provided if direct loss of revenue is caused when a government authority orders the closure of business, such as in the event of a curfew.

For example, if a fire breaks out in a restaurant, commercial property insurance will pay to replace inventory damaged in the fire as well as any damage to the building. Business interruption insurance, on the other hand, helps pay bills, replace lost income, and cover payroll while the restaurant is temporarily closed for those repairs. Other events covered by business interruption insurance include wind, hail, vandalism or damage to your building or equipment. However, damage caused by flood, earthquakes, or broken glass are typically not covered.

Business Interruption Insurance FAQ


Business Interruption Insurance Lawsuits


Many environmental exposure or toxic exposure cases in which large corporate polluters cause a large number of people to suffer economic losses are brought on as class action lawsuits. A class action, sometimes called mass tort litigation or multidistrict litigation, is a lawsuit where a group of people with the same or similar injuries caused by a product or action are represented collectively by a member or members of that group.

Recent Business Interruption News


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