COVID-19 (Coronavirus) has caused havoc in our community, country and around
the world. The risk from quarantine and closures is going to devastate
our economy and will have a substantial ripple effect that it will take
years us to recover.
Business owners have seen markets declining and losing trillions of dollars,
in addition to business closures due to inability to operate. This pandemic’s
impact on our economy is unprecedented, as the lockdown will cause businesses
to fail the unemployment rate will continue surging. Business owners will
have a hard time recovering as income will be limited after the lockdown
is over. As a result, business owners will have less income and less profits.
All business owners, regardless of sector, will be severely impacted.
The impact and disruption of the Corona virus is an evolving worldwide disaster. COVID-19 losses may be billions more than the asbestosis losses that almost
destroyed the insurance industry. Insurance companies will face billions
of dollars in claims.
Business owners may be in for a rude shock if they are relying on their
so-called “business disruption insurance” to assist in the
mounting losses being inflicted by the COVID-19 pandemic. Insurance companies
are in the business of making profits, and as business losses pile up,
insurance companies are unreasonably denying claims. Insurance companies
will find any and all reasons to deny claims, while they sit on billions
and billions of reserves for properly made claims. Albeit that insurance
is intended to cover unexpected losses,
the insurance companies are in the business of making profits and will
not easily pay for economic damages related to this pandemic.
As businesses are being closed and/or interrupted, many are left wondering
whether the insurance companies are going to cover their lost profits
and other damages.
The simple answer is it all depends on both the policy language, and perhaps
your lawyer’s creative thinking. Moreover,
COVID-19 IS PROBABLY COVERED by a business owner’s commercial property insurance, and not only
by the “business disruption insurance.”
Business Insurance Policies are “All Risk” With Limits, Sub-limits
and Exclusions. The language of the policies controls your coverage's.
It often limits amounts payable per coverage type. The stated coverage
in the Declarations is often significantly reduced by later fine print,
especially for Business Interruption and Cyber insurance claims.
Your probable coverage's are in your policy provisions for:
Business Interruption - covers your lost profits resulting from covered events;
Contingent Business Interruption - covers your losses from damage to critical suppliers, like Chinese drywall
or steel for contractors, or customers;
Extra Expense - covers costs for continuing usual business activities after losses,
things like salaries, rent etc;
Civil Authority - covers losses due to government restrictions or limitations on use of
Lost or Restricted Access – covers losses from inability to enter or leave your property;
LIMITATIONS: “Direct Physical Loss” to the insured property is typically
required, which necessitates an investigation and evaluation of the specific
facts and causes of each claim.
COVID-19 IS PROBABLY COVERED by a business owner’s commercial property insurance. Insurance Coverage
is an unusual and peculiar area of the law. We have the experience and
knowledge to assist you in obtaining every insurance benefit you have
already paid for.
Here is what you must know and do NOW.
Locate your insurance policies. Business Owners, Property & Cyber. Yes, Cyber too.
Carefully read and understand your policies and their specialized terms. That language was carefully drafted by the
insurance company lawyers. It is NOT intended to benefit you.
If you do not fully and completely understand all of the terms and language
in the policy,
contact us- we can help.
Remember, successful insurance claims require
a.) astute policy analysis, and
b.) proper claims tender. The insurance industry has specialized experts drafting
policies language, documenting losses, and defending claims.
At MAS Law Firm, we bring a diverse breadth of experience to every case, while maintaining an avid involvement in the Dallas community. Click below to learn more about our passionate advocacy for our clients and our community.