Check Your Insurance Policy For Coverage Due To The Covid-19 Pandemic

If you’re a New York business owner who’s been forced to close as a result of the coronavirus pandemic and you carry commercial business insurance, this would be a very good time to carefully read your policy. In particular, you’re going to want to have a look at what kind of coverage you have for specific types of loss, including “physical loss of or damage to” your business property and anything related to “civil authority.”

For example, some businesses around the country have submitted claims for loss of income based on “physical loss of or damage to” physical property. Specifically, businesses are claiming that, because the pandemic has forced them to close their doors, they have suffered “physical loss” of the use of their business location.

News reports are identifying that insurers are reflexively denying such claims based on the grounds that the “physical loss” has to be the result of physical damage. While our firm doesn’t litigate insurance claims, we would recommend getting in touch in the event your claim is rejected. In that event, we could make referrals to commercial litigators who are helping businesses like yours more aggressively assert their claims.

Before you make a claim, however, it’s important to also check your policy for applicable exclusions, meaning is there any language in your policy that excludes benefits associated with pandemics, viruses, etc.

Another avenue a business may be able to take includes claims based on an order of civil authority. This is particularly relevant here in New York where the governor has issued an order mandating all non-essential business to close. Therefore, if your policy states it will cover losses due to orders of civil authority, now could be a very good time to make a claim.

There’s a great article on the New York State Bar Association’s web site that outlines the different claims a business could potentially pursue when making a claim for loss of business income as a result of the pandemic.

The key takeaways when it comes to making claims for loss of business income as a result of the COVID-19 pandemic?

• If your policy provides for the types of coverage discussed above, submit the claim. The worst possible outcome is that your claim is denied but until you do that, you won’t know for sure.

• And if you contact your insurance broker who then advises that your policy doesn’t cover a claim for losses due to the pandemic, it may be worthwhile to make the claim anyway.