A Small Business Owner’s Guide to Insurance Coverage During the Pandemic

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A Small Business Owner’s Guide to Insurance Coverage During the PandemicThe nation’s response to COVID-19 hasn’t been easy on small business owners. Because of various federal and state orders, many companies have had to close their doors, and some will undoubtedly struggle to reopen once the civil authority actions have been lifted.

If your business has taken a hit because of the pandemic, you may be wondering what kind of recourse you have for recouping the resulting losses. It’s natural to feel hopeless during such uncertain times, but there may actually be a provision in your insurance policy that can help.

A civil authority clause provides coverage for earnings lost because of government orders. If the county or state denied access to your business, for example, you could file a claim under your loss of business income coverage (BIC). Of course, whether your carrier will actually honor the provision without putting up a fight is another story.

Many insurers responded to the emergence of COVID-19 by issuing preemptive statements that their property policies do not cover pandemic-related losses. Because it’s impossible to apply such a sweeping generalization, however, business owners shouldn’t let such statements deter them.

As long as your property insurance policy includes coverage for loss of business income, you may be able to file a claim if the following applies:

Your Premises Were Potentially Contaminated

Generally speaking, property insurance covers “physical loss or damage,” as well as the costs that stem from the associated interruptions. And since courts have widely upheld the argument that contamination by the novel coronavirus constitutes physical loss or damage, an insurer cannot deny your claim simply because you didn’t incur any structural damage. In the midst of a pandemic, potential contamination should be enough to warrant a claim because it renders the premises unusable by physical forces.

Your Business Was Ordered to Close

If your insurance policy has a civil authority clause, you may be entitled to compensation for losses stemming from mandated stay-at-home orders. As long as you were ordered to halt operations by a governing body, you should have grounds for a claim under your civil authority coverage.

Insurers may try to deny such claims by arguing that stay-at-home orders do not apply to specific locations (e.g. your place of business) but, rather, to people; however, case law has generally been in favor of policyholders regarding this issue. After all, while the mandates don’t name any companies in particular, they apply to most operations, and their terms explicitly inhibit the use of the insured premises.

Speak with a Detroit Insurance Dispute Attorney Today

Dealing with stubborn claims adjusters can be time-consuming, stressful, and downright draining. If your business insurance policy includes a civil authority clause but your carrier is being uncooperative, contact Seva Law Firm.

Our seasoned team deals with insurers on behalf of clients on a daily basis, and we’re not afraid to stand up to even the largest corporations. Call (248) 385-5704 or fill out our Contact Form to schedule a free consultation with an insurance dispute lawyer in Detroit.