According to the National Law Review, businesses who had to stop operation when the government issued stay at home orders, may have the right to make a business interruption insurance claim under the civil authority coverage of a business interruption policy. Business interruption insurance is often contained within property insurance coverage, and is often designed to pay for a loss to a business when property damage results in interruptions to the business. Some business interruption policies specifically include language that allows a business to make a claim when a civil authority order results in the interruption of business.
There has been a great deal of debate about whether business interruption policies will cover COVID-19 business interruption claims. Some business owners claim that because their policies didn’t explicitly exclude viruses, that they have the right to make a claim, while insurance companies have claimed that because there was no physical damage to the business, the insurance company shouldn’t be obligated to pay the claim. There have been several disputes already about whether the coronavirus can be considered to cause physical damage to a building.
Congress has asked insurance companies to honor their policies and to cover COVID-19 losses and the state legislatures of New York, New Jersey, Ohio, and Pennsylvania have also called on insurance companies to honor their policies.
If you are a business owner in Florida, especially if you are a restaurant owner, hotel owner, or other small business owner with business interruption insurance, you shouldn’t wait until the government orders insurance companies to protect your business. Instead, business owners should be proactive and review their policies now. Business owners who believe they should be covered should make a claim as soon as possible. There have been many cases across the country where businesses were explicitly covered for virus-related losses and insurance companies still denied their claims. In some cases, business owners paid extra for extra business interruption coverage and are now finding these claims denied. If your claim was wrongfully denied, you might have the right to pursue a lawsuit against your insurance company for insurance bad faith.
Already some small business owners are pursuing lawsuits against insurance companies for denial of business interruption insurance claims. The Sun Sentinel reported that a restaurant sued its insurance company for denying its COVID-19 claim. Florida was subject to a civil authority order requiring businesses to shut down on account of COVID-19. Business owners who had business interruption insurance that covered them in the event of a civil authority order claim that their insurance claims should be honored and that their claims have been wrongfully denied. These cases are likely to be fought vigorously by insurance companies, and it is likely that restaurant owners and small business owners face a long battle ahead.
Interestingly, Broward county’s civil order language explicitly mentions “property damage due to it’s [the coronaviruses] proclivity to attach to surfaces for prolonged periods of time.”
What does this mean for you as a small business owner? If you have questions about whether your Florida small business interruption insurance policy will cover losses due to COVID-19, consider reaching out to Leader, Leader, & Zucker, PLLC, a Fort Lauderdale, Florida first-party insurance claims law firm today. Our attorneys may be able to assist you. Or, reach out to USAttorneys.com today to get matched with an attorney at Leader, Leader, & Zucker, PLLC.