Chef Abraham Salum opened his restaurant in Dallas 15 years ago, but was forced to temporarily close it in March when the city issued a stay-at-home order in order to stop the spread of the novel coronavirus (COVID-19). It crippled his business.

Like dozens of other restaurant owners in North Texas suffering economic damages from the government-mandated COVID-19-related shutdown, Salum turned to his insurance company to file a business interruption claim. It was abruptly denied.

“It was just very confusing,” Salum told The Dallas Morning News.

Unfortunately, Salum is not alone. Business owners across the country filing business interruption claims just to keep afloat during the shutdown are feeling left in the lurch by their insurers.

Business interruption insurance is part of a business owner’s insurance policy. It provides funds to cover payroll, bills, and other operating expenses in the event a disaster forces the business to temporarily close. After outbreaks of viruses like SARS and MERS in the early 2000s hinted at the risk of a larger pandemic, some insurance companies added exclusions to their commercial property and business interruption policies to exclude coverage related to viral outbreaks.

Many insurance companies didn’t specifically list pandemics as an exclusion, but are telling their customers that they will not cover them during the COVID-19 shutdown.

The insurance industry and its powerful lobby are working hard to skirt the issue, arguing that covering such losses would be detrimental to the industry. Business owners are fighting back, filing lawsuits against their insurance companies demanding coverage they feel they are entitled to. Business owners, like Salum, say they’ve been paying premiums for years for protection during disasters. Insurance companies should just do “what is right,” he said.

Businesses seeking to sue their insurers for business interruption coverage should first file a claim with their insurance company to preserve any legal claims 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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