Coronavirus / COVID-19: Business Interruption Insurance Claims and Other Insurance Claims Relating to Economic Interruption.
Businesses across Washington State, the United States, and frankly, the entire world have been drastically impacted by the coronavirus and the actions governments are taking to mitigate the spread of the virus.
Many restaurants, bars, retail shops, and other businesses believed that their business interruption insurance policies would provide the crucial safety net and income that they would need to get through this difficult time. Unfortunately, many are finding that their insurance companies are denying coverage.
The following is an excerpt from a letter sent by Travelers Insurance Company to its policy holders in New York:
Travelers Letter to New York Property Insurance Policyholders
Travelers wants to provide certain information to policy holders explaining how our Business Insurance property coverage applies to business interruption loss due to COVID-19 (coronavirus).
Insurance for business interruption can provide coverage when a policy holder suffers a loss of income due to direct physical loss or damage to covered property at its location or another location. It does not cover loss of income due to market conditions, a slowdown of economic activity or a general fear of contamination. Nor does the policy provide coverage for cancellations, suspensions and shutdowns that are implemented to limit the spread of the coronavirus. These are not a result of direct physical loss or damage. Accordingly, business interruption losses resulting from these types of events do not present covered losses under our property coverage forms.
Even if there has been direct physical loss or damage to property, your policy contains a number of exclusions that are likely to apply to business interruption losses. The most important exclusion to note is the exclusion for losses resulting from a virus or bacteria, which would include coronavirus.
Please refer to your Travelers policy for additional provisions that may apply. Coverage can depend on underwriting qualifications and state regulations. If you have questions regarding your policy, please contact your agent or broker….
Two Critically Important steps every business with an insurance policy that may provide coverage for economic loss should take:
First, if you have a business interruption insurance policy it is important to make a written claim, regardless of whether or not you have been told (or believe) that your insurance company may not cover your loss. Submitting a claim will trigger certain obligation on your insurance company. For instance, if your company is denying coverage, your company will most likely need to give you written reasons why.
Second, if your claim has been denied, it is important to read the reasons for the denial. This is the point when it probably makes sense to contact an attorney who has experience reading insurance policies and contracts, has knowledge of the applicable law, and has experience working with insurance companies and bringing a lawsuit if merited and necessary.
Our office is located in Seattle, but we handle cases all throughout Washington State. If you need help, please give us a call at 206.386.5566.