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Collecting Compensation for Loss of Extended Business Income During the COVID-19 Pandemic

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Businesses across the state have been hard hit by the COVID-19 pandemic. Fortunately, those  who have business interruption insurance may be able to weather these difficult times and obtain monetary relief from their insurers. It’s important to note, however, that not all business interruption insurance policies are created equal, with many policies excluding certain events or limiting the amount that a company can recover, so if you own a business in Florida and have experienced a loss of income due to the COVID-19 emergency, it is important to speak with a dedicated Fort Lauderdale business interruption attorney who can assess the terms of your policy and evaluate your case.

Business Income Relief

Business owners who experience a loss of income due to a natural disaster or a global catastrophe, (categories that may include pandemics), could be entitled to compensation for the economic losses they suffered as a result of physical loss or damage to their property. Covered businesses will only be able to collect a dollar amount that is equal to the losses that they actually sustained, up to a policy’s limits if:

  • The suspension of their business operations was necessary; and
  • The suspension produced a business income loss that is payable under the policy.

If approved by an insurer, this type of claim will cover certain types of business income, including:

  • The company’s net profit or loss before income taxes that it would have earned if the covered accident hadn’t occurred; and
  • The cost of continuing normal operating expenses, such as payroll.

It’s important to note that while insurers could be liable for the loss of business income during a covered emergency, they will only need to compensate policyholders for losses incurred after the date that the physical damage actually occurred and up until the date when the property is officially restored, repaired, rebuilt, or replaced. This is true even if the policy in question actually expires before the period of restoration is completed, as long as the physical loss itself occurred during the policy period.

Extended Business Income Loss

Coverage for loss of business income generally ends on the date that:

  • A company could restore operations to the level that would generate the amount of income that would have existed, but for the physical loss or damage to business premises; or
  • 60 consecutive days after the date of the initial emergency.

In some cases, however, including during the current pandemic, companies may find themselves in financial trouble for much longer than they anticipated when entering into their contracts. Fortunately, policyholders who find themselves in this situation can often extend their period of coverage for up to 720 days by sending a request to, and extending their period of indemnity from, the Insurance Service Office (ISO).

Get Legal Help Today

For help with your own questions about business interruption insurance coverage, please contact the dedicated business interruption attorneys at Boone & Davis by calling 954-566-9919.

Resource:

sun-sentinel.com/coronavirus/fl-bz-fort-lauderdale-restaurant-sues-over-biz-interruption-claim-20200421-5hqoy6zyxfen5ig7bvk7h6a2v4-story.html

https://www.booneanddavislaw.com/civil-authority-coverage/

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