- On April 18, 2020
There are more questions than answers when it comes to COVID-19 business interruption insurance coverage and many of the claims being filed have already been denied. Federal and state mandates could reverse that trend and force carries to pay valid business interruption claims caused by COVID-19 but that decision is likely months away.
If you have already filed a claim or are considering it, knowing in advance why it could get denied can help prevent costly mistakes. Read on to learn the common reasons business interruption claims are denied and what options you have.
1. Policy Limits
This limit is set when you purchase the coverage. Typically, you select the type and extent of the coverage. Your claim could be denied because your claim exceeds the coverage limits, you already exhausted your coverage limits, or you are filing a claim for coverage that you did not purchase.
2. Clauses and Exclusion
Some business interruption policies contain civil authority clauses, which will cover income loss if a government denies access to a business. For example, a fire at a neighborhood property has made the area unsafe. Most insurance carriers excluded coverage for viruses after the SARS outbreak from 2002 to 2004. Insurances are claiming that COVID-19 is not covered because a virus isn’t a direct physical loss.
3. Policy Interpretation
The big question right now is if losses due to forced closure of a business to slow the spread of COVID19 falls under standard business interruption policies. Insurers say no – polices only cover physical damage to property.
COVID-19 Business Interruption Claim Denied? Here’s What To Do:
- Gather all information possible. This includes correspondence to and from the insurance company, a record of demonstrable losses, and a copy of your policy
- Act quickly. There may be certain deadlines that dictate how much time you have to file your claim against the insurance company.
- Contact us. We have adopted COVID_19 safety measures and can meet you virtually, or by telephone or email. We will asses the information you’ve given us and the steps to take to move forward.
- Let an experienced individual represent you. By hiring us, we represent you and contact the insurance company and negotiate on your behalf.
It’s more important than ever to know what your policy includes and to file a claim if you are experiencing losses related to COVID-19. Contact us today for a free comprehensive policy review and learn how we can help.