Coronavirus Sparks Changes in Insurance Language

Without a doubt, many people are worrying about their health and safety – many others are worrying about their financial stability, especially if they have businesses to keep afloat during this time of difficulty. There are more than 200,000 confirmed cases of COVID-19; more than 8,000 people have lost their lives to the virus. More than 80,000 people have recovered after becoming infected by the virus. Because COVID-19 continues to spread, the government has implemented a number of restrictions. These restrictions were put into place to reduce the risk of the virus continuing to spread unchecked. For example, large-scale events that warrant crowds have been canceled or postponed. Many school districts have closed down schools and have even canceled graduation ceremonies. Bars have also been ordered to close. Restaurants have been limited to only fulfilling take-out and delivery orders. The community has been told to practice social distancing and stay home except when completely necessary. Many businesses have been affected by people staying home. They have suffered significant financial losses that are expected to get worse. Many of these businesses will continue to strain their finances as they attempt to decontaminate their business, protect their business interests, and keep their employees safe. Many of these businesses will be able to benefit from their insurance policies.

Business Interruption Insurance

Many businesses carry business interruption insurance, which is designed to cover some of the losses associated with disastrous events Typically, business interruption insurance covers the losses associated with natural disasters, including hurricanes, tornadoes, and earthquakes, for example. After all, these natural disasters could severely affect businesses. What does business interruption insurance typically cover? In general, these insurance policies could cover some of the following losses:

• Profits – the profits that the business would have earned (typically based on prior earnings)
• Fixed costs – the operating costs or other costs incurred by the business
• Temporary location – the costs associated with the need to temporary move the business and operate from another location
• Commission and training expenses – for the costs related to training staff on any new equipment replaced by the insurance company
• Extra expenses – repayment for reasonable expenses (not fixed costs) that allowed your business to continue operations
• Civil Authority Ingress/Egress – coverage for government-forced closures leading to a loss of earnings.

Although this insurance exists, and many businesses have coverage, many are worried about whether the losses associated with the pandemic will be covered. The language used by insurance companies can be complex; therefore, it can be difficult to understand whether the losses associated with COVID-19 are covered.

You Must Understand Your Insurance Policy

To determine whether the economic losses associated with the COVID-19, you will need to thoroughly review your policy. It is important for policyholders to be aware that insurance companies will sometimes overly complicate the language in the policy – to make coverage unclear. This is not unique to insurance companies offering business interruption coverage; unfortunately, all insurance companies are capable of using overly complex language to purposefully mislead policyholders. If policyholders do not know that they are covered, they will simply not pursue insurance claims – and insurance companies will save on payouts.

Legislation is Aiming to Change Insurance Language

Because of the recent events associated with the spread of coronavirus in the U.S. and all over the world, legislation is in the midst of development to essentially negate the effect of exclusionary (and confusing) language in policies. New Jersey, among other states, and even the federal government, are discussing potential changes in legislation to force insurers to cover COVID-19 business interruption insurance claims. This legislation would directly counter Insurance Services Office (ISO) Form CP 01 40 07 06. ISO CP 01 40 07 06, which states that there would be no coverage for claims in the event of a virus or bacteria capable of inducing physical distress, disease, or illness.

Seek Legal Assistance Today

There is no doubt that the coronavirus has harmed and will likely continue to harm your business. However, not all is lost. Your business interruption insurance might ultimately cover the financial losses associated with COVID-19. If you have any questions about your right to pursue a business interruption claim for the losses associated with COVID-19, do not hesitate to contact the experts at our firm immediately. Downtown L.A. Law Group is ready to provide you with all the information that you might need to pursue your claim. Our firm offers free legal services – including free consultations and free second opinions. Our firm also offers a Zero-Fee guarantee that ensures that our clients will never be required to pay upfront legal fees for any of our legal services. Our firm is based on contingency, meaning that our clients will not be required to pay anything until after reaching a successful claim outcome. If you are ready to discuss your current situation with the experts at our firm, do not hesitate to contact us immediately at (855) 339-8879.