Does Business Interruption Insurance Cover COVID-19 Losses?
In March, Florida’s governor issued a stay-at-home order to help counter the spread of COVID-19 across the state. Unfortunately, these orders have resulted in the permanent closure of hundreds of businesses in Florida and across the nation, placing many residents in dire financial straits. While it is true that some businesses will simply be unable to recover from COVID-19-related closures, companies with business interruption coverage in their insurance policies may have a better chance of recouping some of their losses and keeping their businesses afloat.
Unfortunately, whether the COVID-19 pandemic falls under the purview of a company’s business interruption insurance policy is not a clear cut matter, so if you own a business in Florida and have questions about your own corporate insurance policy’s coverage, it is important to contact an experienced business interruption insurance lawyer who can evaluate your claim.
What do Business Interruption Insurance Policies Cover?
Business interruption insurance is designed to compensate business owners for any lost revenue resulting from a forced closure. While most of these policies do specifically cover losses resulting from a government agency’s decision to cease operations, they are generally intended to cover weather-related incidents, like federally-declared natural disasters. As more and more companies permanently close their doors, however, business owners across the state are filing claims with their insurers, stating that closures resulting from government mandated shutdowns should qualify for compensation. Unfortunately, many insurers disagree, claiming that viruses like COVID-19 don’t actually cause physical property damage and so are not provided for under business interruption insurance policies.
Does COVID-19 Compromise the Safety of a Company’s Business Premises?
In response to denials issued by insurers across the country, many Florida business owners have begun filing lawsuits against insurers that fail to compensate them for COVID-19-related losses. According to the claimants, a serious virus like COVID-19 compromises company property, creating a dangerous risk, such as a contaminated surface or air quality, to visitors and employees.
In response to the general confusion regarding the application of business interruption insurance in our current situation, a number of states are considering new laws that would force insurers to cover COVID-19 business-related losses, regardless of any exclusions already contained in pre-existing contracts. Whether Florida lawmakers will follow suit remains to be seen, but residents can expect that the lack of certainty in regards to business interruption coverage will continue for the foreseeable future.
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Businesses are currently facing huge losses as a result of the COVID-19 pandemic, which has had a devastating financial impact on companies across the country. In these scenarios, a business interruption insurance policy could make all the difference when determining whether a company must lay off employees or even close its doors permanently. To learn more about the type of language that could trigger coverage in your own policy, please contact the experienced Fort Lauderdale business interruption attorneys at Boone & Davis by calling 954-566-9919 today.