As the coronavirus epidemic continues to bring society to a standstill, many business owners are really feeling the pinch. When California Governor Gavin Newsom issued a shelter-in-place order on March 19, 2020, numerous business owners were forced to either shut down indefinitely or operate on a limited basis. Not only does that mean significant lost revenue for the business owners who were forced to shut down, those who can continue with limited operations often struggle to earn enough revenue to meet their basic needs.
Unexpected Business Losses Caused by Coronavirus
When a business is forced to close its doors for any reason, their losses might not necessarily be limited to the revenue they would have been generating. Payroll still needs to be met. For companies that lease their locations, rent payments still need to be made. If taxes are due, the IRS will still expect to be paid. Payments will still need to be made on outstanding business loans. Sometimes, companies need to relocate to be able to keep operating.
When businesses need to shut down under unusual circumstances, such as events like the coronavirus epidemic, they may experience other types of unexpected business losses. For example, coronavirus has had such a significant impact around the world that many companies are experiencing supply chain disruptions that could potentially last for months to come.
Coronavirus & Business Interruption Insurance Claims
Business owners typically like to have a plan in mind if something happens that significantly hinders their ability to conduct business. Very commonly, this involves buying a business insurance policy that includes business interruption coverage.
Business interruption insurance is a type of insurance that helps cover unexpected losses caused by a temporary business closure. While property insurance covers things like repairs to a property, business interruption insurance covers monetary losses like employee wages and lost revenue.
Unfortunately, with so many businesses impacted by the coronavirus epidemic, insurance carriers are taking the approach of broadly denying claims for business interruption insurance benefits, even if those claims were valid. One common argument they’re trying to use is that these business locations were not physically damaged by the coronavirus.
Coronavirus & Civil Authority Insurance Coverage
When insurance carriers deny business interruption claims, policyholders often start wondering if they have any other types of insurance coverage that applies to their situation, such as civil authority insurance.
Civil authority insurance is a type of coverage that applies to temporary business closures caused by a government order. While this type of coverage doesn’t necessarily require physical damage to a business’s location, it’s commonly used when there is some type of physical damage near the business that results in a government order requiring nearby businesses to close. However, just as insurance carriers are trying to argue that coronavirus isn’t a type of physical damage in standard business interruption claims, they’re trying to use the same argument to deny civil authority insurance claims.
Coronavirus & Contingent Business Interruption Insurance
Many types of businesses rely on other businesses as part of their operations. For example, if a retailer depends on receiving merchandise being produced by one manufacturer, there are instances where the contingent business interruption can be claimed on the insurance to protect them if that manufacturer is suddenly unable to produce merchandise.
With the coronavirus epidemic causing widespread supply chain problems, many business owners can seek to make a contingent business interruption claim to help them out while they try to get back on their feet. Unfortunately, these types of claims are frequently being denied by carriers who don’t want to pay for coronavirus-related shut-downs.
How to Get Help with a Coronavirus Business Interruption Claim
When insurance carriers wrongfully deny business interruption claims, they make it more difficult for business owners to get valuable assistance when they need it most. At The Wallace Firm, we’re working with California business owners to help them get the benefits they need. Whether your claim has been denied or you’re getting ready to make a claim, we can help if you meet the following criteria:
- You own a business in the state of California
- Your business has been impacted by the coronavirus pandemic
- You have a business insurance policy that includes business interruption coverage and/or property/casualty coverage
Our lawyers have years of experience taking on insurance companies and fighting to get results for our clients. And when you work with us, you don’t have to worry about whether or not you can afford legal help. We handle coronavirus business interruption cases on a contingency fee basis, which requires no hourly fee and no retainer. If there is no recovery on the claim, there is no fee owed and we will advance all costs, which are only reimbursable if there is a recovery. Contact us today for a free case evaluation and find out how we can help you.