Insurance companies are refusing to cover business interruption claims from businesses that have been forced by the government to temporarily close to stop the spread of the coronavirus (COVID-19), according to Insurance Business America.
Business interruption insurance is a part of a business owner’s policy. It covers payroll and bills when a business has to shut down for a period of time due to a disaster like a fire or hurricane. But restaurants, bars, hair and nail salons, and other businesses that have been shuttered due to the COVID-related government-mandated shutdown have turned to their insurers for a much-needed lifeline but are being told that the interruption insurance they’ve been paying on, in some cases for years, does not cover viral pandemics.
The American Property Casualty Insurance Association explained why the industry is so against covering the costs. The organization estimated that small businesses in the U.S. are losing between $255 billion and $431 billion every month, which is a far cry from the roughly $6 billion a month they collect from premiums.
But as President Donald Trump said recently during a White House coronavirus task force press briefing, he’d talked to restaurant owners who had paid on business interruption policies for 35 years. Something doesn’t add up.
“They’ve been paying a lot of money for a lot of years,” Trump said. “And then when they finally need it, the insurance company says, ‘we’re not going to give it.’ We can’t let that happen.”
Renowned chefs Thomas Keller and Wolfgang Puck have created a nonprofit “Business Interruption Group” or BIG, to put pressure on insurers to do the due diligence and pay up. At least eight states have introduced bills that would require them to pay on the policies.
Attorneys with Beasley Allen Law Firm are actively pursuing these cases already with our clients who received a denial communication from their insurance companies. 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.