Business interruption insurance is a lifeline for owners of any type of business. In the wake of the unexpected COVID-19 pandemic, many business owners are filing claims with their business interruption insurance carriers in the hopes of keeping their employees paid and staying afloat long enough to reopen once “stay home” orders are lifted. Unfortunately, all too many business owners are finding that insurers are denying their business interruption claims without any investigation. Perhaps never before has claims denial been as complicated as it is during the coronavirus outbreak. Learn more about your contractual and legal rights and what you can do if your carrier denies your business interruption insurance claim.
When Business Interruption Insurance Applies - And When It Doesn’t
Business interruption insurance is a specific type of coverage that business owners commonly purchase in tandem with their property insurance. Business interruption policies generally cover business losses that occur due to a lack of access to the property. Fires and natural disasters are commonly covered, and some policies have a “civil authority” provision that provides coverage when the government restricts access to the property, as they might through condemnation.
Like any insurance coverage, business interruption policies cannot explicitly state every situation in which they do or do not apply. Instead, policies are written with broad coverage categories, such as "natural disasters." This ambiguity allows some insurers to deny claims, reasoning that they do not apply to the broad coverage categories. But ambiguity also allows you to get your own lawyer to prove that the coronavirus does, in fact, fall under your coverage.
The Lawsuits Have Already Begun
The Chicago Tribune recently interviewed several different business owners whose insurance carriers denied business interruption claims related to COVID-19. A movie theater owner reported that his claim was denied within a day of being submitted. This means the insurer took no time to investigate the claim or consider its contractual obligations under the policy. It had simply enacted a blanket policy of denying all business interruption claims related to the coronavirus pandemic.
But what exactly are insurance carriers obligated to cover? After the SARS virus outbreak in 2002 to 2004, many business interruption policies were written to include explicit exclusions for business losses as a result of viral outbreaks. These exclusions could protect an insurance company’s decision to deny claims related to COVID-19. But business owners might find other grounds for their claim. For example, many policies cover losses that occur when the government restricts access to your business. Under this coverage, a business could claim business interruption as a result of current "stay home" or "shelter in place" orders.
These many conflicting provisions have proven highly contentious. Business owners have already begun to sue their insurance carriers to enforce their contractual right to insurance coverage. The stakes are high on all sides. The insurance industry is not designed to bear the brunt of many losses concentrated in a short period of time. If coronavirus claims bankrupt the insurance industry, all policyholders across the country might be in jeopardy of having home, auto, and other insurance claims denied, as well.
So what should South Carolina lawyers do if their business interruption claims are denied by an insurance carrier? You have the right to hire your own attorney to enforce your contractual right to insurance coverage. South Carolina law also provides attorney’s fees and fines for plaintiffs who are the victim of a bad faith insurance claim denial.
Call Us Today to Discuss Your Case with a Lawyer
At Hayes Law, we know how to handle insurance companies that deny claims. The coronavirus pandemic is unprecedented, and insurance policies may not clearly state whether they apply to this unique situation. Our skilled lawyers know how to fight for your right to the insurance coverage you have paid for. Call (843) 805-7003 or contact us to schedule your consultation. Our lawyers have extensive experience working with insurance claim denials, and they can help protect your right to file an insurance claim during these unprecedented times.