Business Interruption Insurance Claims
Small businesses are the lifeblood of South Florida’s economy. Most – particularly in the restaurant, hotel and hospitality industries – know business interruption insurance coverage is an imperative. Florida’s annual hurricane seasons are proof enough of that.
The COVID-19 pandemic brought into stark relief just how vital this type of coverage is. However, most insurance companies are currently denying all claims relating to Coronavirus losses; as such, filing a successful claim may seem like an even steeper uphill battle.
This does not mean you cannot secure the fair compensation you are owed. It does mean that you will need an experienced Fort Myers business interruption claim attorney to help you do it.What is Business Interruption Insurance?
If your South Florida business has been temporarily shuttered by external factors like a public health crisis, natural disaster, fire, civil authority shutdown or other unforeseen circumstances, business interruption insurance is intended to provide coverage that can help buoy the firm until you’re back on your feet.
These policies have been purchased to cover things like:
- Lost Income/Profits.
- Operating Expenses.
- Temporary Relocation (if necessary).
- Extra Expenses.
Business interruption insurance, typically an add-on or rider to the property/casualty insurance of comprehensive or “all risk” package policies, should also be applicable if government agencies force you to shut down temporarily due to circumstances outside your control – unless the policy states otherwise. That would include the government-mandated shutdown of non-essential businesses during the COVID-19 pandemic.
Premiums for these plans are considered tax-deductible as ordinary business expenses. The amount you receive is typically based on the company’s previous financial performance.Dealing With Business Interruption Claim Denial
Securing business interruption insurance payouts has never been an easy task. Insurers are not generally eager to pay policy limits on any plans - even under normal circumstances.
The COVID-19 pandemic resulted in claims like these being filed in tsunami-like waves. Many Fort Myers, Naples, Cape Coral and Key West business interruption claims are being severely underpaid, if at all. Most are being denied outright, with insurers scrambling to identify any possible loophole that would allow them to label a pandemic exclusion – even if the words “pandemic,” “virus,” or “public health emergency” are not necessarily explicitly cited in exclusion provisions of the policy.
While our legal team, in business for more than 40 years, recognizes the COVID-19 situation is unprecedented, there is really nothing new as far as the insurance industry’s disaster playbook. It involves these huge corporations seizing on any legal theory that might allow them to deny valid claims – and hoping you won’t fight back.Business Interruption Claim Litigation
Business insurance companies spend years collecting hefty premiums from clients but are too often quick to withhold money when disaster strikes.
It’s unclear as of this writing the exact number of Florida businesses adversely impacted by the pandemic shutdowns or to what extent. The World Economic Forum reports the U.S. economy could take three years to fully recover. Certain industries, such as restaurant and hospitality, are likely to be harder hit than others.
As reported by Insurance Journal, numerous lawsuits were filed in response to business interruption claim denials. Insureds argued forced closure by order of civil authorities in response to a pandemic is a circumstance under which insurers should be liable. Some insureds have paid hundreds of thousands of dollars extra on their policies for provisions that expressly included claims for pandemics and public health crises – and still, their claims were denied.
Meanwhile, insurance industry advocates are insisting they cannot be liable for business interruptions resulting from precautionary closures – only those that involve physical damage of the property.
Their other argument is they simply cannot afford COVID-19 claims. The American Property and Casualty Insurance Association estimated aggregate losses for all U.S. businesses of fewer than 100 employees to be more than $430 billion monthly – which is between 40 and 70 times the monthly commercial insurance premiums. Pandemics, the APCIA insisted, were not insured because, “they are uninsurable.” They took it a step further by saying if they are forced to pay COVID-19 business interruption claims, there will not be enough left over to provide adequate coverage of things like workers’ compensation insurance for medical workers and first responders.
Yet insurance revenues have soared into the trillions in recent years. And while insurers insist the entire industry intentionally excluded pandemic-related business interruption coverage across all sectors and geographies, the fact is: That precise language does not exist in many business insurance policies.
The Florida Supreme Court held in the 2013 case of Washington Nat’l Ins. Corp. v. Ruderman that anytime there is an ambiguity in policy language, it is to be construed in favor of the policyholder – without consideration of extrinsic (outside) evidence.
If your South Florida business has been shut down due to COVID-19, natural disaster or other crisis, our experienced legal team can help you navigate this process and will advocate for a fair payout according to the terms of your business insurance policy.
At this time our office is evaluating possible coverage under the following coverages (or provisions): Property Insurance, Pollution / Environmental Policies, Event Cancelation Insurance, Commercial General Liability Policies, Business Income Insurance, Civil Authority Coverage, Extended Business Income Coverage, Direct Physical Loss or damage.
For more information on business interruption insurance claims, contact The Garvin Law Firm for a free consultation with our Fort Myers attorneys.