Having an insurance claim denied can be an unfortunate setback or a disaster, depending on the circumstances. For a business that has seen its operation shutdown, business interruption insurance coverage could be the difference between survival and failure. Recent events have stressed many businesses up to, or past, the breaking point. Some have insurance policies that should cover certain losses, if the insurance company upholds its end of the bargain. Sadly, when it comes to sizable claims, insurance companies excel at shirking their responsibility.
Understanding Business Interruption Insurance And Civil Authority Insurance
Business interruption insurance should be available to policyholders who were forced close their doors due to something like COVID-19 contamination. It generally covers business stoppages caused by physical damage, often due to things like fire, severe weather, or similar events. It covers costs associated with the cessation of the business, including lost profits.
Civil authority insurance is specifically intended to cover losses associated with government action that makes doing business impossible. If a business cannot open or operate because of a shutdown by federal, state, county or city authorities, this type of insurance can help cover the loss.
Lack Of Physical Damage
The tactic taken by many insurers is that these policies do not cover losses that are not attended by physical damage. COVID-19, for example, does not shutdown businesses by destroying the actual property involved. Some policies specifically exclude coverage in cases based on communicable illnesses. Coverage for your business depends, to a large extent, on the wording of your policy and previous legal challenges involving such coverage. If you are looking to file a claim, or have seen your claim denied, it is important to understand that the insurance company is not a reliable source of information. Claim denials are not the end of the story. An attorney who understands insurance disputes can give you an honest assessment of your rights under your existing policies.