Due to the COVID-19 pandemic, restaurants and other businesses throughout the U.S. face a significant threat of having to lay off workers or even permanently close. Even restaurants that offer take-out or delivery options are unlikely to make up even a small percentage of their lost sales during this government-mandated shutdown.
Suffering business owners may turn to their insurance policies’ business interruption coverage, believing this is precisely the type of situation for which the insurance was purchased. While many business policies likely contain such coverage, whether or not it applies depends on the precise language of the policy and any arguments that may be made in support of coverage.
Most policies may contemplate providing coverage only when the business interruption follows physical damage to the business’ property. However, a lawyer with experience in the area of insurance disputes can identify other provisions or arguments that compel the insurance company to provide coverage or settle for a reasonable dollar amount. For example, the lawyer may argue that the virus has, in fact, caused physical property damage by contaminating the business premises.
What to Do and What to Know
The first thing any business owner should do is immediately make a claim with his or her insurance company and obtain a copy of the applicable policy. If the company denies the claim, the owner should not automatically accept that denial as valid, even if the language of the policy seems clear.
Indeed, most (if not all) states have a general rule that any ambiguous language in an insurance policy will be interpreted against the insurer and in favor of coverage. As demonstrated in Lincoln Cty. Ambulance Dist. v. Pac. Employers Ins. Co., 15 S.W.3d 739, 743 (Mo. Ct. App. 1998), language is considered ambiguous if it is reasonably open to different interpretations. Whether language is reasonably open to different interpretations depends on the lawyer’s arguments and the decision of a judge.
Ultimately, the decision of the insurance company is not the end of the story and should not be accepted without first consulting with a lawyer. Businesses are strongly encouraged to fight back, and there is no better way than by engaging competent legal counsel.
At Gates Shields Ferguson Swall Hammond P.A., we will not stand for insurance companies attempting to circumvent their obligations. Business interruption insurance is meant to provide businesses with the peace of mind knowing they will survive an unexpected disaster. COVID-19 is an unprecedented global crisis, and it is time for your insurance company to provide the support to which you are entitled. To get in touch with our team of attorneys, call (800) 574-4428 or fill out our online contact form today.