The spread of the coronavirus has caused businesses across America to face unprecedented financial hardships. Shelter-in-place orders have forced people to stay in their homes and out of storefronts and large social gatherings. As quarantines persist, the health risk improves but the economic impact worsens, putting businesses and their owners in precarious situations.
There is some good news, though: If you have a business interruption insurance policy, then the impact of the coronavirus/COVID-19 pandemic could be covered and provide you with much-needed financial support. The bad news is that many dishonest insurance companies are going to challenge every business interruption claim that they can to try to minimize how many policy payouts they make. What can your business do to utilize your business interruption insurance policy during the coronavirus?
Understand Your Policy Front-to-Back
You need to know the details of your business interruption insurance policy. Most of these types of policies will trigger if you are forced to halt operations due to a natural disaster, like a flood or tornado. Not all of them have a policy that specifically regards closures due to the spread of a life-threatening illness. However, many policies do provide coverage if your business is closed by a civil authority or government order, like a quarantine order.
The types and amount of coverage that your policy will offer also depends on the details in your policy. You might be able to collect damages to help pay for rent, employee paychecks, and lost income, for example. Or you might have a more limited policy that only provides for your rent. It cannot be stressed enough that the details of your policy make a big difference.
If you have a knack for running a business but do not have one for interpreting insurance policy jargon, then you should work with an insurance claim attorney who can review your policy. With their input, you can get a clear picture of what your policy covers and what you have to do to file a claim to get that coverage. Your lawyer should also be able to help you if – or when – the responding insurance company denies your claim.
Why are Insurance Companies Denying Claims?
After a natural disaster tears through a region, thousands of homeowners will need to file insurance claims in a short amount of time. The result is that insurance companies need to pay monumental amounts to policyholders, practically all at once. To try to avoid that massive responsibility, many insurance companies default to less-than-honest business tactics, such as denying a claim without a proper case evaluation, taking as long as possible to respond and creating unnecessary delays, or offering lowball settlements that reflect only a fraction of what the policyholder needs and deserves.
The coronavirus pandemic is a natural disaster of its own in that it has impacted thousands of businesses all at once. There has been a huge influx of business interruption claim filings, and so, dishonest insurers are already panicking and trying to do all they can to deny completely justified claims from businesses both big and small. In anticipation of this sort of reaction to your business interruption insurance claim filing, you should, once again, team up with a plaintiff insurance claim attorney as soon as possible.
What Business Models Have Been Hurt the Worst?
Practically every business in the nation has had to change its operations or completely close its doors due to the threat of COVID-19. However, some industries have felt its impacts worse than others, and they need the most help from business interruption insurance providers.
Businesses and establishments suffering heavy losses due to the coronavirus pandemic include:
- Restaurants: The American pastime of going out to eat with family and friends has come to a complete stop because of the coronavirus. Restaurants have been forced to resort to takeout or delivery options only, which tend to result in smaller tickets with minimized profit margins.
- Bars: Any establishment that primarily serves alcohol to its patrons like bars and clubs has essentially no wiggle room to continue business during the pandemic. Alcoholic products cannot be served “to-go.”
- Hotels: With travel becoming extremely limited and inherently dangerous due to the typical close quarters in planes, trains, and buses, hotels and motels are seeing fewer and fewer people coming through their doors, despite them being considered essential businesses.
- Retailers: Some storefronts have been able to stay open due to selling essential products, like food and day-to-day necessities. Others have been forced to switch their operations entirely to online shopping options.
- Landlords: Both commercial and residential landlords are also feeling the financial squeeze caused by the coronavirus. Individual tenants who struggle financially cannot pay their rent, which means that landlords are not paid and make no income themselves. The financial ripple effect is devastating.
- Churches: What many do not realize is how churches and other religious properties have been slammed by the coronavirus. Gatherings to worship have been banned in practically all counties, so there are no opportunities to collect tithes and donations.
Business interruption insurance policies might cover all of these types of businesses, though. It all depends on the details of the policies they carry, which will vary from one business to the next.
Katz Kantor Stonestreet & Buckner, PLLC serves Princeton and all of West Virginia, offering legal guidance and support for business owners who need to use their business interruption insurance policies. We are currently assisting and hearing from clients throughout the state, including a church that is fighting their insurance provider. Let us be your strength during these unprecedented times, too. Call (304) 713-2014 to begin your claim.
