By Contributing Author
With the Coronavirus pandemic disrupting the economy in unprecedented ways, business owners are searching out any lifeline which can help keep their business afloat during the crisis.
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However, as thousands of business owners begin the process of filing insurance claims, there exists fears that not all legitimate claims will be paid out by insurers.
Despite businesses paying for so called “business interruption” insurance, insurers have been quoted in recent press articles stating that business losses under COVID-19 may not be written into the clause of their policy. Since the COVID-19 pandemic is such a rare occurrence, it may be uncharted territory for major insurers.
“We are combing through policies,” said Jeremy Diamond, Senior Partner at Diamond and Diamond Lawyers. “Hours after the government took steps to protect its citizens, business owners began contacting their insurers for relief.”
Covid-19 has undeniably interrupted business for millions, but some business interruption insurance policies explicitly do not cover pandemics. Other policies include a variety of terms and conditions which may allow the insurance agency to deny the claims based on the specific circumstances of the pandemic.
“Every policy is different so it’s important that a lawyer combs through your policy and analyzes the facts and policy language,” said Diamond.
As thousands of businesses seek to recoup their losses, business owners are increasingly likely to turn to their legal teams to demystify the details of their complicated insurance policies.
One form of insurance which may come to the aid of ailing business owners in the coming weeks is insurance coverage for supply chain interruptions.
Supply chain interruptions result in a variety of costs which may be covered by insurance policies. These policies can help business owners cover lost revenue, payroll losses, and a variety of other expenses.
Disruptions in the supply chain include restrictions which prevent customers from shopping. Many insurance policies offer “civil authority” coverage, which covers expenses if government authorities prevent customers from accessing a location.
With daily warnings to remain at home and minimize time spent in public coupled with increasing restrictions on movement, we are likely to see a rapidly growing number of insurance claims invoking these types of coverage.