Two New York lawmakers are leading the fight to make insurance companies cover business interruption claims made by business owners who were forced to temporarily close operations due to the coronavirus (COVID-19) pandemic, the Brooklyn Paper reports. State Senator Andrew Gounardes introduced a bill in the senate. Park Slope Assemblyman Robert Carroll sponsored the legislation in the assembly. Both the senate and the assembly have referred the bill to committee.
Business interruption insurance is generally included in a business owner’s policy. It offers businesses a lifeline in the event of a disaster. For example, if a business has to temporarily shutter due to a fire, its business interruption insurance — sometimes called business income insurance — helps cover bills and payroll while the business is closed.
But many businesses, such as restaurants, bars, hair salons, and retail stores, have contacted their insurance companies to collect on the business interruption insurance they have been paying on for years, only to find out the one disaster their business interruption insurance doesn’t cover is a pandemic.
“The insurance industry is sitting on $900 billion in reserves while small businesses who have paid business interruption premiums for years have their claims denied over and over again because the insurance industry claims COVID-19 doesn’t constitute a business interruption,” Carroll said. “This is absurd, greedy, immoral, and factually incorrect.”
Many of the businesses who have been left out in the cold by their insurers are struggling to pay employees and are facing whether to close for good. Furthermore, 84% of the borough’s businesses that applied for the federal Paycheck Protection Program did not receive funding, according to a survey by the Brooklyn Chamber of Commerce.
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.