Tips For Filing A Business Interruption Insurance Claim Due To COVID-19
July 29, 2020 • By George Saba
Many businesses in our Commonwealth are feeling the economic pains as a result of the statewide shutdown. Some businesses have laid off the majority of their employees, may be contemplating bankruptcy or even thinking of shutting down.
Before making any of these decisions, you should make sure you have exhausted all potential sources of economic help. While there are several federal programs available, if you are a business owner, you should also immediately check your insurance policy.
When you purchased the policy, your agent should have discussed the addition of Business Interruption coverage. Business Interruption insurance generally protects you in the event that your business is forced to close because of an event like a fire or other calamity. It may also be applicable in the event of a disaster like COVID-19.
Here are three steps to follow to determine if Business Interruption coverage can assist your company.
Check your coverage: The declarations page of your policy will list business interruption coverage. If your company has it, your policy will include a specific endorsement. Business Interruption coverage may be limited to a time period or a dollar amount, but a strong argument can be made that the coverage is applicable to business losses as a result of the COVID-19 government-ordered closures.
Submit a claim: If you have coverage, submit a claim to your insurance carrier. You will need to determine the amount of your loss for the claim and you will need to prove your loss. Consult your accountant, if necessary, to help determine the amount.
Don’t stop at a denial: Most insurance policies require “physical damage” to your business before coverage is applicable. An argument can be made that the closing of your business because of COVID-19 does, in fact, amount to physical damage to your business. Insurance carriers, however, are facing a large number of COVID-19 related claims and they will be heavily scrutinized. Don’t be surprised if the insurance company initially denies your claim. That denial may be improper.
COVID-19 has created uncharted waters for many situations. Business Interruption insurance is just one. Denial of a claim does not mean the end of the line. If you have a claim, or if your claim has been denied, email Jonathan Young or George Saba or call 215-362-2474. We are experienced in insurance coverage and claims and can assist you with COVID-19 related issues.
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