As businesses fight to keep their doors open, they should not overlook a short and simple task that might provide some help in the long run: putting their insurance carriers on notice of business interruption losses.
Business interruption insurance does not usually make the nightly news, but in these unprecedented times, even the President of the United States is talking about it. A group of celebrity chefs have formed Business Interruption Group, “BIG”, a non-profit whose sole purpose is to force carriers to pay COVID-19 business interruption claims. Indeed, several states are considering legislation that would require insurers to pay such claims. Meanwhile, insurers warn such legislation would bankrupt the entire industry.
Many business interruption claims will be denied, for example where policies have an applicable virus exclusion or the lack of “directly physical loss” of property. However, not all policies are the same. The terms of your particular policy will govern your claim for coverage. It’s worth looking at your policy and likely worth putting your carrier on notice. The upside justifies the minimal effort needed to provide notice.
On the other hand, businesses that fail to put their carriers on notice will almost certainly miss out on coverage. As the old adage goes, you miss 100% of the shots you do not take.
If you want to pursue business interruption coverage, you should obtain a copy of your insurance policy and call your broker. Your insurance policy will set out how to provide notice and what is required. Your broker also can help you submit notice.
In addition to notice, you should carefully document your losses. Keep all receipts, take pictures, make notes, keep detailed financial records, etc.
Balch & Bingham is assisting clients with insurance issues related to COVID-19 across the country. If you have questions, please contact Chris Yeilding or Steven Corhern in Balch's Insurance Coverage Practice.