Businesses stiffed by insurers refusing to cover business interruption claims related to closures due to the government-mandated stay-at-home orders to stop the spread of the coronavirus (COVID-19) should look closely at their business owners’ policies as there may be language that could lead to coverage.

This applies to businesses who have already been denied coverage as well as those who haven’t filed claims. Legal experts believe that the insurance industry is trying to discourage business owners from even making claims. Insurers, of course, have denied these assertions.

Business interruption insurance, part of a business owners’ policy, covers payroll, bills, and related expenses for businesses that are forced to temporarily close due to a disaster, such as a hurricane or fire. Some policies explicitly exclude pandemics. Others do not. Those that don’t argue that since the pandemic didn’t cause property damages that forced businesses to temporarily close, such as in the case of a fire, claims are not covered.

But legal experts say that even if a business didn’t suffer property damage, they still suffered property loss, which would qualify for coverage under business interruption claims.

Some insurers have cited “microorganism exclusions” when denying claims. But viruses are not considered microorganisms. Others have argued policies have limited virus coverage, and denied coverage if the virus was not actually present on the property. And even some insurers are rejecting claims if businesses have received money under the federal government’s Payroll Protection Program.

The most important thing businesses can do under these circumstances, legal experts say, is to file a business interruption claim with their insurer. Doing so preserves a potential legal claim moving forward.

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.

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