Please note: These Frequently Asked Questions and Answers for Covid-19 Business Interruption insurance claims are intended for general information only. They are not intended to be used in place of actual legal advice that you can receive by speaking with a qualified attorney. If you believe that you have an insurance claim, we recommend that you call a qualified business interruption claims attorney today.
- I have a loss to my business. What do I do?
The first step to opening a claim is simple – you will either call your insurance company, your insurance agent or submit a form online. However, it is important to understand what coverage you have in your policy before you provide any specific details to the insurance company. We suggest that you simply state that you are making a claim because of recent events and the losses you have incurred. It is appropriate to say that you are not sure of the details yet or that you simply do not know the answer at this time.
Many policies have deadlines that require you to make a claim promptly after a loss. Additionally, the science regarding the virus is evolving, and the window for documenting the loss may be closing. Making a claim is the first step to protecting your rights.
We also recommend that you obtain the following documents:
- A copy of your policy (be sure you have all of the attachments and endorsements)
- Any claim correspondence from your insurance company
- Your denial letter, if you have received one
If you are missing any of these documents, we recommend that you contact your insurance company or insurance agent for copies. Our team of lawyers and experts can assist you through the process if you have questions or concerns.
- I have an exclusion. Why would the insurance company pay me?
Every single policy needs to be reviewed separately and independently for coverage. As you have probably already seen, most commercial insurance policies are long and complicated. However, that complexity can sometimes work to your advantage. Almost every one of these policies is written to be vague and hard to understand – so that the insurance companies have as much “wiggle room” to deny claims as possible. When we review policies for our clients, we are looking to determine whether the exclusions are too vague or whether the insurance company is applying the correct language.
While your insurance company is looking for reasons not to pay your claim, we are searching for coverage that can provide compensation for all or part of the loss. We look for coverage in a number of different ways.
First, we have to determine the type of policy that you have. Virus is almost never listed as a specific covered loss, so we look for coverage in a number of other places – a careful analysis of any Civil Authority (usually requires an offsite covered loss that shuts down the business) and Ordinance or Law (usually requires an onsite covered loss) coverage can sometimes find coverage, even when the virus is not named as a covered type of loss in the policy, and even occasionally when there is a virus exclusion. Without a detailed policy review in every case, a consumer can’t really determine if she may have coverage because most policies are different. Even “form” policies will have a different set of endorsements or limitations that significantly change the coverages that are available.
Most policies require us to first find a covered “accidental direct physical loss” on the property. In our experience, insurance companies are not conducting any substantial analysis to determine if the Covid-19 virus has actually contaminated the property. There is some evidence that the virus could cause a physical loss to property, but that fact is not being considered by the insurance industry in general.
- What damages are available?
The coverages you have available under your policy will determine the types of damage you can claim under your policy. Some common examples include:
- Lost business income
- Employee salaries
- Food or inventory loss
- Extra expenses you incurred because of the shutdown
- Lost rent and lease payments
In addition to seeking damages you have lost because of Covid-19, we also pursue claims for “bad faith” against insurers who wrongfully delayed or denied the payment of claims when coverage should have been provided. These types of claims may also allow for the recovery of additional damages like attorney’s fees or certain types of damages that require insurance companies to pay additional damages when they violate the law.
- My adjuster told me that I have an exclusion. Does that mean that I don’t have a claim?
Even if you have been denied, you have a right to pursue coverage after a denial. We have seen evidence that insurance companies are sending similar denial letters across the country – often with little or no investigation. As we learn more about the virus and its origins, it is possible that additional coverage could apply that the insurance company never considered – like coverage for terrorism. At this stage, nobody knows enough about the virus to be certain that an exclusion made by an insurance company today will still be correct tomorrow. Our firms will provide a free review of your claim to determine if you have coverage.
- Will opening a claim make my premiums go up?
In many jurisdictions, forces of nature will generally not cause your insurance premiums to increase. However, insurance companies have been raising rates across the country, regardless of the number of claims made. Unfortunately, in the current climate, increasing insurance rates are a fact of life for most businesses, whether a claim is made or not.
- My friend opened a claim and was denied. Are all policies the same?
No. Some insurance companies use standard forms, but the combination of coverages, endorsements and exclusions will likely be different for most businesses. An exclusion that may apply to your neighbor may not apply to you or your business. Each policy needs to be reviewed by an experienced insurance lawyer to ensure that your rights are being fully protected.
- I’m already losing money every day that my business is closed. How can I afford a lawyer on top of that?
You do not have to pay us anything unless we recover for you. Unlike the insurance company’s lawyers, we do not get paid by the hour. We are paid on a contingency, which means that we do not get paid unless we recover proceeds for you from the insurance company or anyone else responsible for your loss.
- What kinds of claims are we handling?
We are evaluating any business insurance losses that are delayed, denied or underpaid. If you believe that your claim was wrongfully denied or has been underpaid, we will evaluate your claim.
- What are my chances of actually getting anything out of this?
Unfortunately, this depends on the type of coverage that you have. We can only determine what coverage you have (or don’t have) by reviewing each policy independently and examining the specific facts of your case. Even when coverage appears to be excluded, there may be a path forward, while other policies may completely bar coverage. We will review your policy for free and at no obligation to you to determine if you may have coverage for all or part of your loss.
- I have heard there is legislation being drafted to help me. Why would I hire a lawyer if I can just do it myself?
While there is some proposed legislation pending at the state and federal levels, it is unclear what, if any effect, this will have on business owners. Even if a fund was established for Covid-19 losses, it is likely that claims will require expert documentation and the preparation of claim forms. Our team of expert accountants, economists and lawyers will assist our clients in pursuing all of the remedies available whether they come through the court system, legislation or both.
- My local government has ordered a shut down. Does that have any effect on my claim?
Depending on the language of your policy, a local order declaring that the virus causes physical damage to property could be helpful in establishing coverage, but would just be one of a number of facts to be considered in evaluating coverage for your loss. These orders may also trigger separate coverages in your policy, like Civil Authority and/or Law or Ordinance coverage.
- How long does a lawsuit take?
We have already filed lawsuits and are pushing to have our clients’ cases heard across the country. Ultimately, courts will set the schedule for the way that cases are heard and the schedule for each case. We believe that the insurance companies will try and delay the process as long as possible. However, many states allow for the recovery of additional damages for delay, which could help consumers fighting insurance companies who have wrongly delayed or denied the payment of claims.
- My insurance company tells me there is no property damage. What does that mean?
Many policies require “accidental direct physical loss” to the property before coverage will apply. Unfortunately, we have seen insurance companies denying coverage on virus claims repeatedly without conducting any actual investigation into the facts of the claim. We have learned that insurance companies have done no testing to determine whether the virus causes a physical loss, even when existing science suggests that the virus causes a physical loss. Many orders issued by state and local governments have determined that the virus can cause a physical loss, but unfortunately, most insurance companies are ignoring any evidence that does not support a claim denial.
* Frequently Asked Questions for Covid-19 Business Interruption Claims