During the COVID-19 pandemic, many businesses depend on recovering funds by filing a business interruption claim with their insurance companies. Businesses have been filing lawsuits against insurance companies throughout the country, claiming that the insurance companies breached contracts with them by not providing coverage for the government-imposed shutdowns.
Business Interruption Claims
If you are a business owner and your business has been shut down due to the coronavirus pandemic, you may have a valid claim to compensation through your insurance policy. Every commercial insurance policy is unique, but many of them provide coverage for business interruptions.
Many insurance companies are contending that they are not legally obligated to cover damages related to viruses. After the Zika outbreak took place during the 2016 Olympics, many insurance companies updated their coverage to eliminate disease-related events.
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Businesses Should Consult Their Insurance Policies
All business owners will need to consult their policies to see the terms set forward. Some policies only allow coverage for lost “business income,” “extra expenses,” and “contamination” that kick in if a business has incurred extra expenses due to involuntary business interruption. When an insurance policy does not expressly exclude losses due to pandemics, companies may be able to make a compelling argument that the insurance company should cover lost income due to the coronavirus shut-down orders.
Some Insurance Companies Have Already Paid Business Interruption Claims
Wimbledon has received a payout of approximately $141 million after they had to shut down the world-renown tennis tournament due to the coronavirus. Similarly, the NCAA recovered $270 million. Their insurance policies allow for coverage during a pandemic. As soon as the coronavirus became a pandemic, they became eligible for an insurance payout.
The Houston Rockets Have Sued Their Insurance Company
The Houston Rockets have brought a lawsuit against their insurance company for the denial of their coronavirus-related claim on their business-interruption policy. Some other sports franchises have been able to recover some of their losses. Still, the Rockets are the first National Basketball Association team to file a lawsuit to recover damages for the COVID-19 shutdown.
Specifically, the Houston Rockets have sued Affiliated FM Insurance after the insurance company denied their $400 million claim for business interruption due to the coronavirus outbreak. The owners of the Rockets have paid over $700,000 in annual insurance premiums on the business-interruption policy, which is worth over $400,000.
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Many More Businesses Will Likely File Lawsuits
The American Property Casualty Insurance Association (APCIA)to file a claim successfully. As mentioned above, some insurance policies have exclusions for viral infections.
Contact an Experienced Lawyer as Soon as Possible
If you are a business owner or manager, and you are concerned about how your business will survive as coronavirus shutdowns continue, we recommend speaking to an experienced lawyer as soon as possible. Companies often pay extremely high insurance premiums so that they know they will be protected in the event of an emergency.
The sooner you speak to an experienced lawyer, the better. At Heninger Garrison Davis, we have a successful track record of holding insurance companies that act in bad faith accountable. Contact our Alabama law firm as soon as possible to schedule your initial consultation.