Business Interruption Losses: The Battle for Insurance Coverage

Nationwide, the Covid-19-related losses faced by businesses have been devastating. Now, business owners who have paid insurance premiums for years are being met with yet another setback: insurance carriers are denying their claims for these pandemic-related losses.

The business interruption battlegrounds were initially established during the SARS outbreak back in 2003. Some insurance carriers realized they could not predict the volume and size of claims they would be obligated to pay. Some carriers began sending out policy change notifications saying that business insurance policies were never intended to cover viral outbreaks. Others did not. The consequence for small business owners is the same: claims for losses due to the coronavirus are being rejected.

These scenarios are being played out in courts across the U.S. Legislation is being introduced in numerous states (including Pennsylvania) which may void policy exclusions for Covid-19 related interruptions, but so far none have been enacted. Meanwhile, President Trump and the Justice Department have been asked to get involved. Insurance company lobbyists in Washington are in overdrive maintaining that the federal government should be funding companies for their losses, not insurance carriers. The carriers have gone so far as to say their industry’s solvency would be at risk if they are forced to pay out business interruption claims arising out of the coronavirus pandemic.

If you are a business trying to navigate the troubled waters of proving your financial losses, you will need an experienced attorney to maximize your company’s benefits. Contact Leonard Sciolla today and ask to speak with John J. Leonard or Paul H. Schultz