- On May 5, 2020
- coronavirus, covid, COVID19, public adjuster
Have you already filed a business interruption claim due to COVID-19? If the answer is yes, you could be seeing a payout on your claim faster than originally anticipated, even without any official ruling from the government. A recent article from the Insurance Journal and an article from Zelle LLP, tell us all the signs are looking towards carriers paying valid claims.
Setting The Precedent
In Pennsylvania, four parties brought a petition for relief against the governor’s order that shut down non-essential businesses because of COVID-19. They argued they could still run their businesses while following the social distancing practices and other CDC guidelines. The State countered by saying the Governor has the right to issue such orders in the name of combating public health emergencies, and the order was “the only effective way to reduce the spread of the disease.”
As with many other cities and state, the Pennsylvania Emergency Code defines a natural disaster as:
“Any hurricane, tornado, storm, flood, high water, wind-driven water, tidal wave, earthquake, landslide, mudslide, snowstorm, drought, fire, explosion or other catastrophe which results in substantial damage to property, hardship, suffering or possible loss of life.”
While there was no case against a specific insurance company, nor a claim for business interruption insurance, the court issued a ruling in response to the petition for relief.
The Court found that COVID-19 should be treated like all other types of natural disasters and COVID-19 has the ability to cause “substantial damage to property, hardship, suffering or possible loss of life.”
In addition, the Court said that because the virus is spread from person to person contact and can live up to surfaces on days, it is within the disaster area and is damaged. The Court enforced the Governor’s order by stating the “COVID-19 pandemic is, by all definitions, a natural disaster and a catastrophe of massive proportions.” The Pennsylvania Order agrees and states “business property has been damaged and is unsafe due to the coronavirus.”
It is likely that this Pennsylvania case is setting the precedent for all other business interruption claims. The reasoning being if a pandemic is indistinguishable from other natural disasters, where coverage for losses is expected, then the same would be extended to business interruption claims due to COVID-19.
As with any insurance claim, policy language and interpretation is key. There are also other factors that could impact your existing claim including specific exclusions. If you have already filed a claim or are waiting for a decision from a state or decision before you start the process, having an expert on your side can and will help. Contact us today and get a free claim review.
Was Your Existing Claim Denied?
If you filed a COVID-19 business interruption claim and it was denied for a lack of “direct physical damage to insured property” you may have the ability to counter that decision, especially now with this ruling. Contact us today and get a free claim review and learn how our experts can help.