DO I HAVE A BUSINESS INTERRUPTION CLAIM?

As of late June 2020, the coronavirus (COVID-19) has affected approximately 216 counties/territories, all of which have positive COVID-19 cases. Globally, there have been 10,185,374 confirmed cases. There have been 503,862 confirmed deaths related to the virus worldwide. In early March 2020, COVID-19 was declared a pandemic. Just a few days later, the U.S. declared a national emergency due to the outbreak.

It has been more than four months since the start of the pandemic – four months of restrictions implemented to reduce the number of cases. Schools, beaches, and parks were closed due to the pandemic (some of which have reopened). Many businesses were also forced to close – only businesses deemed essential were allowed to remain open, even then with restrictions. As businesses closed, people also lost their jobs.

The Coronavirus has Caused More than Health Issues

Although the coronavirus pandemic has caused millions of people to become infected and more than 500,000 thousand to, unfortunately, lose their lives, it is important to acknowledge that the pandemic has resulted in much more than sickness. As briefly mentioned above, the pandemic has forced many businesses to close. Only essential businesses, like gas stations, pharmacies, food-providers (grocery stores, food banks, take-out/delivery restaurants, and convenience stores, for example), banks, and essential state/local government functions were allowed to remain open.

All other businesses, most of which were small businesses, were forced to close. Although some of them tried to remain open by offering online services, delivery, and curbside pickup, for instance, many small businesses still went under. These business owners lost everything through no fault of their own. If the businesses had been allowed to remain open, the businesses would have continued to prosper even during the pandemic; instead, they lost everything due to a combination of the pandemic and the government closures.

What is Business Interruption Insurance?

If you are a business owner, you likely have insurance coverage that could prove to be helpful in a number of unforeseen situations. You might even have something called businesses interruption insurance. What is business interruption insurance and how can it help you during this time?

Business interruption insurance is a type of insurance that could cover financial losses associated with disasters. When business owners with business interruption coverage file claims, they could be eligible to recover compensation for the losses associated with the specific disaster. If you are a business owner, a successful claim could result in monetary compensation for losses associated with the following:

• Temporary locations – the costs associated with relocated the business to continue operating from elsewhere
• Profits – for all projected profits that were lost as a result of the disaster
• Fixed costs – for the costs of operation incurred by the business during the disaster time
• Extra expenses – for any reasonable costs (not fixed costs) required to allow the business to continue operating
• Commission and training costs – for the costs related to training employees to use new work-equipment replaced by the insurance company
• Civil Authority Ingress/Egress – for any profits that were lost associated with government-enforced closures.

Could this insurance coverage apply to the losses associated with the pandemic? If your insurance policy does not strictly exclude coverage in the case of a virus or a pandemic, losses might be covered. However, business owners with policies that do not explicitly include or exclude pandemics are finding it difficult for their claims to be taken seriously by insurance companies.

Insurers Do Not Want to Pay – Understanding Insurance Bad Faith

Insurance companies have remained firm in the claim that business interruption insurance is not meant to cover pandemics. According to the National Association of Insurance Commissioners, pandemics violate the principle of insurance (in which policyholders pool risks to fund a few losses at a time) because, during pandemics, all policyholders suffer losses at the same time. Regardless of this claim, California has warned insurers that they must fairy investigate all business-interruption claims; this comes after Insurance Commissioner Ricardo Lara has received complaints of insurance companies attempting to dissuade business owners from filing claims as well as failing and refusing to investigate the claims that have already been filed.

Without a doubt, business interruption claims related to COVID-19 can result in significant losses to insurance companies. However, if business owners have coverage, they should be able to pursue claims for their losses. As mentioned above, there have been complaints of insurers trying to persuade individuals not to file claims and even ignoring claims that have already been filed – this is considered to be bad faith, and insurers could be held accountable.

What is bad faith? Bad faith occurs when insurers are dishonest and fail to fulfill their legal obligations to their claimants. For example, they might deny claims even if they are valid. They might also attempt to trick their claimants to discourage claims or encourage claimants to withdraw claims, for example.

Although business owners are required to have insurance coverage, most of them are inexperienced in dealing with insurance companies; therefore, they can be easily taken advantage of by insurers acting in bad faith. In addition to a lack of experience, the lack of information as well as a lack of representation can contribute to claimants being taken advantage of insurers.

Do You Have a Claim?

If the pandemic resulted in business losses, could you file a business interruption claim? If your policy does not exclude coverage during times of pandemic, you might have grounds to file a business interruption claim. You will need to gather all documents associated to the financial losses to your business associated with the pandemic. What if your insurance company is refusing to acknowledge your business interruption claim? If your insurance company seems to be working against you, you might have grounds to file a bad faith claim.

Regardless of the specific situation, you might have grounds to file a claim. Because dealing with insurance companies can be so complicated, affected business owners should consider seeking legal assistance. Although having the representation of an experienced attorney does not guarantee that your claim will be successful, it can facilitate the process and simply make things easier for you.

For more information about your right to pursue a business insurance claim or a bad faith claim, depending on your specific situation, do not hesitate to seek legal assistance with the experts at our firm at your earliest convenience.

Contact Our Firm Today

At Downtown L.A. Law Group, our experts have many years of experience handling all sorts of claims – including claims against insurance companies. At our firm, we acknowledge that insurance companies often do not make things easy for claimants; rather, they often complicate matters to avoid giving fair payouts. If you are interested in learning more about your right to pursue a business interruption claim or a business interruption bad faith claim, do not hesitate to seek legal assistance with the experts at our firm as soon as possible. Our lawyers are ready to provide you with all the information that you need to file your insurance claim.

At our firm, we offer free legal services. Our free legal services include free consultations and free second opinions. During our free consultations and free second opinions, our lawyers will be available to answer all your questions and address all your concerns – our experienced business interruption attorneys will be available to provide you with all the information that you might need to start or continue your claim. If you would like to benefit from these free legal services, do not hesitate to contact the experts at our law firm today.

Our firm is also based on a Zero-Fee guarantee and a strict contingency structure. Because of our Zero-Fee guarantee, our clients will never be required to pay any upfront legal fees for any of our legal services. Because of our contingency structure, our clients will never have to pay anything until after reaching a successful claim outcome. If you do not win, you will not have to pay anything.

At Downtown L.A. Law Group, we understand the difficulties that business owners have faced due to the coronavirus pandemic. Our lawyers will not rest until you are compensated for your losses.