It has been a terribly long two months since COVID-19 began visibly spreading through our communities. While some states have relaxed their shutdown rules, we are a long way from returning to normal. For many small and medium businesses, the hardship has only just begun. Even those that are allowed to open may not have the customers and patrons they had before the pandemic began. Some are under new restrictions that limit their clientele. The economic fallout could last for months or even years.
Business owners have understandably wondered whether they might have insurance coverage to help with these financial losses. Many business insurance policies have “business interruption” and other forms of coverage that might apply in this crisis.
An Insurer’s Denial of Your Claim Isn’t Final
Unfortunately, insurance companies have refused so far to take these claims seriously. Most have adopted a policy of “blanket denial.” They are turning their business-owner policyholders away reflexively without any serious consideration of their losses.
Not all business policies will cover losses associated with COVID-19. However, some insurance policies are written in a way that will allow you to make a credible claim. Not all policies use the same language, and not all businesses have been affected in the same way. Subtle differences could be the key factor in whether your losses are covered or not.
For this reason, a business owner should not simply take an insurance company’s denial as a definitive answer. Obviously, insurance companies have all the incentive in the world to “hold the line” on this. In the long run, however, they will not be the ones to decide. The courts will have the final word on whether the terms of an insurance policy grant coverage or not.
Can Lawmakers Help Business Owners?
Predictably, insurance companies have already begun to complain to lawmakers about how coverage for COVID-related losses will hurt their bottom line. It’s far from clear that this is fully truthful. Technically, every settlement an insurer pays out will reduce their yearly profits. That doesn’t mean they can refuse to pay! Even if they do believe they will suffer unsustainable losses, the reality is business owners are already having their bottom lines clobbered by COVID-19. In a time of great need, they should receive the coverage for which they’ve been paying.
If insurance companies really do end up suffering greatly, they can appeal for financial relief just like other affected industries. Congress can give them grants or loans to pay their employees if these claims disrupt the orderly function of their markets. There will be time for that if it’s needed. In the meantime, small businesses need help just to stay afloat, and insurance companies shouldn’t turn them away just because they’d prefer not to pay.
We urge affected business owners to have a discussion with our attorneys about their legal rights. Call us now at (727) 877-1212 or send a message online for your free consultation.