Business’ covered by a Business Loss Insurance Policy may be entitled to certain coverage for COVID-19/Corona Virus losses. The criteria to trigger coverage depends on the language of your insurance policy. Most business insurance policies require that the insured (business owner) show actual physical damage to their premises in order to collect for the losses. Thus far in the pandemic, the insurance industry has predictably taken the position that the virus has not caused actual “physical damage” and thus, they are repeatedly denying claims that have been by brought business owners due to COVID-19/Corona Virus. We do not necessarily agree that the insurance carriers are correct.
On the contrary, there are valid arguments that coverage should be afforded to business owners. For instance, if Covid-19 contamination to a business facility or property has occurred, it can be argued that that is tantamount to physical damage and loss of use of the property, interrupting business and causing massive losses. If ingress or egress is blocked due to contamination, it may be covered. Further, if actual contamination has occurred to certain dependent or contingent locations relating to supply, distribution, or customer chains, coverage may be afforded. Obviously, the damages due to the pandemic are massive (clean-up expenses, contamination mitigation expenses, cancellation of business events, operations, etc.) but that alone should not be valid basis to deny coverage. Also, civil authority orders that have caused shut-downs and disrupted business may be a basis for coverage.
At Leav & Steinberg we were one of the law firms that represented large numbers of New Yorker’s struggling to collect insurance benefits owed to them after Super Storm Sandy. In those cases we were successful in recovering millions of dollars for businesses and homeowners – most of whom had had their claims denied by their insurance carriers. We again look forward to the fight for fairness.