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What Does Business Interruption Insurance Cover?

Small business owners across the country have been hit hard by the COVID-19 pandemic. Many business owners have been ordered to shut their doors to slow the spread of the virus. And, even for communities that have opened back up, business is slower than usual since more people are staying home.

During this time of economic hardship, many small business owners have turned to their business interruption insurance for assistance. Many claims, however, are getting denied—sometimes unjustly.

Does Business Interruption Insurance Cover Losses Caused by COVID-19?

Business interruption insurance is meant to compensate business owners for losses due to factors outside of their control, such as physical damage, natural disasters, mandated shutdowns, and more.

While it may seem like a pandemic is reason enough for a business interruption insurance claim to be approved, many business owners have run into red tape.

After the SARS outbreak in 2003, many insurance companies specifically excluded damages caused by microorganisms from their policies. However, it’s important to remember that it would be unusual for a policy to specify the company will cover losses due to any form of infectious disease.

Additionally, if the exception clause specifies similar events (bacterial infections/diseases) that can be differentiated from the novel coronavirus, you could be able to make a successful claim.

In short, the way that many insurance policies are worded is very nuanced and requires the expertise of a seasoned legal professional in order to determine whether a claim is valid.

If your business interruption insurance claim got denied, our Jackson attorneys at Richard Schwartz & Associates, P.A. can help you challenge a denial, make legal arguments, and include evidence to show how you should be covered.

We know this time is not easy for anyone, and we want to help business owners through it. Give us a call at (601) 869-0696 to schedule a free consultation.

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