I have a small business that has taken a big financial hit since shutting down due to my state’s stay-at-home order.

Question

I have business interruption insurance, which seemed like the right coverage to apply for in light of what’s going on, but my insurance company denied my claim. I read through my policy, which says nothing about a virus or pandemic being an exclusion. Not sure what I’m paying for if this sort of business interruption isn’t included in my coverage. Can I appeal my claim, and if so, what should I do or say?

Brian Scott Chacker · Answer

You’re not alone with this issue. Unfortunately, business owners all over the country are facing the same issue with their business interruption insurance coverage. Insurers are looking for one way or another to avoid paying claims for coronavirus-related business losses, which is unfair and unacceptable. Most (if not all) of these policies do not have language specifically related to a pandemic, but insurers are citing things like language related to virus exclusions, which some companies added to their policies after the 2003 SARS outbreak. But I hear you that your policy has neither, so your insurer’s denial is likely illegitimate. Since COVID-19 related insurance claims are uncharted waters, the best thing to do is to get the help of a lawyer, because doing so tends to make insurance companies listen up when they act in bad faith. And actually, filing an insurance bad faith lawsuit might be the only recourse to get the reimbursement you deserve. Feel free to give me a call. I would be happy to explain further and give you some advice without obligation.

Elizabeth Tarasi · Answer

Please email me a copy of your insurance policy and the denial letter. My email address is emt@tarasilaw.com

Nancy L Lanard · Answer

You should make sure that you have made a formal request with your carrier as there is likely a great deal of litigation that will likely ensue and possible legislation requiring coverage.  Most business interruption insurance does not cover a virus but will cover governmental authority reasons for closure - in this case government mandates.  That is how the claim should be presented.  I have blog posts on this topic on my website at https://www.lanardandassociates.com/blog/.  Make sure the agent submits the claim officially.  Good luck.

Peter N. Munsing · Answer

1. Ask for them to put in writing the basis for the denial, and to state the policy section and paragraph. 2. To be sure you have what they have, ask for a copy of a)the entire policy b) the application.  
2. If you had an agent that sold you the policy, get them to work on it--sometimes they can get the company to pay.  
3. Once you have the information, copy each document. Send copies to the Insurance Commissioner's office of Consumer Protection. Also let your state rep and state Senator know.

Q: I have a small business that has taken a big financial hit since shutting down due to my state’s stay-at-home order.