Did Your Business Suffer Losses Due to the Coronavirus (COVID-19) Shutdown? Here are Four Things to Know About Business Interruption Insurance

April 26, 2020

By van der Veen, Hartshorn & Levin

In an effort to control the deadly Coronavirus (COVID-19) pandemic, Pennsylvania Governor Tom Wolf ordered the closure of all non-life-sustaining businesses. As of March 23rd, Commonwealth authorities started officially enforcing sanctions against businesses that violate the order to close their physical operations.

An unfortunate consequence of the public safety regulation is that many small and mid-sized businesses are already suffering major financial losses. Here, our Pennsylvania business law attorneys highlight some of the most important things you need to know about business interruption coverage and the COVID-19 outbreak.

1. Business Interruption Covers Losses Related to Disasters

Business interruption insurance is a type of commercial policy that provides a company with economic protection in the event that it is not able to operate. Among other things, this type of policy may cover rent, utilities, payroll, other operating costs, and loss of profits. For example, if a retail store was damaged in a fire, a business interruption policy may cover some (or all) of its costs while it’s closed for repairs.

1. Many Policies Require Physical Damage to the Business to Apply

Unfortunately, a valid business interruption policy does not provide guarantee protection to companies that have suffered Coronavirus-related losses. Here is the issue for Pennsylvania policyholders: Many business interruption policies have exclusions. Your policy may try to exclude coverage for losses related to viruses and/or diseases. Further, in many cases, these policies require physical damage to the business before coverage will apply. That being said, some business interruption policies carry an additional endorsement permitting coverage for virus-related losses.

1. The Specific Terms of Your Policy Always Matter

To know if your business interruption policy covers Coronavirus-related damages, you must review the specific language. Many business owners and insurance companies all around the country are already gearing up for a fight on this very issue. According to reporting from The Wall Street Journal, some claims have already been rejected and some companies are already preparing to file legal action.

1. Insurance Companies May Deny Coverage: You Have the Right to Appeal

One of the most important things that business owners need to know about their business interruption claim is that the insurance company does not get to make the final decision on their case. You always retain the right to file an appeal. Do not assume that you are prevented from recovering compensation for COVID-19 losses. Remember, ambiguities in the insurance policy will be construed in favor of the policyholder. An experienced Pennsylvania business interruption insurance attorney will be able to review your case, your policy, and explain your rights and options.

Call Our Philadelphia Business Interruption Insurance Attorneys Today

At van der Veen, Hartshorn & Levin, our Pennsylvania business lawyers are experienced, solutions-focused advocates for clients. If you have questions or concerns about COVID-19 and business interruption coverage, we are here to help. To arrange a confidential, no commitment consultation, please contact us right away. With law office locations in Philadelphia and Allentown, we serve clients throughout Pennsylvania.