The Coronavirus COVID-19 crisis has disrupted businesses on an unprecedented scale, particularly in Las Vegas and other major cities that rely heavily on tourism and hospitality. As companies struggle to keep their lights on, they may wonder if business interruption insurance can provide them with the relief they so desperately need.
In many cases, the answer is yes. Business interruption insurance covers a wide range of risks and things that can happen to prevent a business owner from conducting normal operations. To properly investigate and make a claim, it’s essential to understand what business insurance is and how it works. Here is everything you need to know about business interruption insurance.
What is Business Interruption Insurance?
Business interruption insurance is a type of insurance policy. It provides a way for a business owner to make a claim for financial compensation if they’re unable to do business due to unexpected disruption. The interruption in the business activity must be involuntary. Some of the losses that may be covered are loss of profit and damages that result from the interruption. When something happens, and a business is no longer able to go about their work, business interruption insurance may cover their losses.
How Does Business Interruption Insurance Work?
Business interruption insurance works by covering risks that may prevent you from doing business. It is not insurance that applies to lawsuits against you. Instead, it is for unexpected reasons that you can’t do business. Fire, vandalism, and damage to the building itself are all examples of ways that a business may be suddenly unable to conduct normal operations. A sudden problem that causes a closure may trigger coverage by the insurance policy.
How the insurance works is that the business owner realizes that they have a sudden interruption in their operations. They determine if they have business interruption coverage included in their policy and that their business interruption insurance policy applies to their situation. They gather evidence of their losses. Then, they submit the business interruption claim.
If the insurance company agrees with your claim, they will issue a full payment for your losses. In some cases, the insurance company may issue a partial payment for only some of your losses. However, if the insurance company disagrees with your assessment and denies the claim for coverage, the parties could have a legal dispute that they may resolve internally or taken to a court.
What Does Business Interruption Insurance Cover?
There are a lot of different types of losses that your business interruption insurance may cover. However, there are several factors that could determine whether or not your business interruption insurance will fully or partially cover these losses. If you have a business interruption claim, any of these damages may be a part of the claim:
- Lost income – Ultimately, you are in business to earn a living. A claim may cover lost income that the company likely would have earned had the interruption not occurred.
- Rent or lease payments – Most businesses have a physical location. That means paying rent or making lease payments for space. These payments can be a part of your claim if you’re unable to meet costs because of disruption to your operations.
- Relocation costs – When a disruption forces you to move locations, either in the short term or the long term, there are costs associated with the relocation of your business. These costs may be covered in an insurance claim.
- Employee wages – Of course, one significant expense of doing business is employee wages. As a business owner, you have obligations to both hourly and salaried employees. These wages may be part of a business interruption claim.
- Taxes – No company can stay in business without paying taxes. When you have a business interruption, coming up with the funds to meet tax obligations can be a challenge. However, a business insurance claim can step in and provide relief funds to meet this obligation.
- Loan payments – All businesses have expenses. Your business may have one or more business loans. These loans may be covered as a type of loss when you suffer an interruption.
Does My Policy Specifically Cover Business Losses Associated with COVID-19?
To know if your policy specifically covers business losses associated with COVID-19, you have to look at the language of the policy itself. It’s unlikely that the insurance policy is going to use the words Coronavirus, COVID-19, or pandemic. Instead, look for broader language that talks about situations where the business is unable to conduct its normal business operations. The policy language might cover physical damages that make the property itself unusable. On the other hand, the policy language might have a catch-all that covers all risks not otherwise listed in the policy.
When it comes to COVID-19, some policies are going to cover losses, and others are not. The determining factors are the language of the policy itself and the way that the courts in your state choose to interpret that policy language. The laws are quickly changing. You may choose to have a business interruption attorney assist you with reviewing your contract.
If you’re in Las Vegas, one of the hardest-hit cities by the Coronavirus pandemic, business interruption lawyers in Las Vegas will determine if your losses for COVID-19 are covered. Many businesses are covered, so it’s important to review your claim with a business interruption lawyer in Las Vegas before making assumptions about your coverage.
What Other Coverage Might Exist in My Policy Associated with COVID-19?
Another type of coverage that you should look for is coverage for infectious diseases. This insurance may cover COVID-19 related claims. In addition, there may be insurance that covers canceled travel arrangements or canceled special events. Finally, if you’re sued because of something having to do with COVID-19, your standard legal liability policy may apply. This type of insurance has to do with claims against you.
Business interruption lawyers can help you conduct a comprehensive review of your insurance policies in order to determine what other coverage might exist. Like your business interruption insurance, the unique policy that you have is what determines your coverage. You may be surprised to learn what’s available in your case.
How To Choose the Best Lawyer for Filing Your Business Interruption Lawsuit
If you have a disruption in operations because of COVID-19, government-ordered closures, or another reason, business interruption claims may apply to pay monetary compensation for your losses. A business interruption lawyer can make the difference in managing the claim and getting you the payment that you deserve.
For an attorney, experience in business interruption claims is critical to helping business owners pursue their claims effectively. In addition, a fully-equipped legal team is another vital part of choosing the best business interruption attorney. With the right lawyers fighting for you and your business, you can receive the financial compensation that you deserve, and get back to business. The insurance companies are not on your side and will often do everything they can to make an excuse to deny your claim. Remember that you have rights and can work with a legal expert in business interruption claims.
Comments