Thank you to everyone who contacted us regarding their business interruption claims. After considering recent court rulings, attorneys working with ClassAction.org have decided to close their investigation into this matter and therefore are no longer reviewing potential cases on behalf of businesses who believe their insurance claims were wrongfully denied. If you have questions regarding your rights, please contact an attorney in your area. The information below was posted when the investigation began and exists for reference only. Our open list of investigations can be found here.
At A Glance
This Alert Affects:
Business owners who had their insurance claims denied for business interruption due to the COVID-19 outbreak.
What’s Going On?
Attorneys working with ClassAction.org are investigating whether insurance companies are wrongfully denying these claims.
If you’re a business owner and you submitted an insurance claim for loss of business related to the COVID-19 outbreak, attorneys working with ClassAction.org want to speak to you.
They’re investigating whether some insurance companies are wrongfully denying these claims and want to help business owners get the money they need to financially recover from the pandemic.
How Could My Claim Have Been Denied?
Some insurance companies are denying claims based on their interpretation that the business owner’s policy excludes losses caused by a virus or related to a government order, such as the mandatory shutdown of all non-essential businesses and stay-at-home directives.
Insurers are also reportedly claiming that businesses cannot prove that physical damage or loss has occurred and that coverage therefore does not apply.
While some policies may specifically exclude losses stemming from viruses – especially since the 2003 SARS outbreak – attorneys suspect that many still do not. Further, even if there is an exception for disease outbreak in the policy, it may be vague (e.g., it may not specifically exclude viruses) and unenforceable.
Civil Authority Coverage
In addition, many insurance policies have “civil authority” coverage that may apply when local, state or federal government prohibits access to certain businesses – say, when a town is forced to evacuate due to an incoming hurricane. Some insurers, however, are reportedly denying claims submitted for COVID-19-related business losses because of the lack of physical damage or loss, as could be the case in the instance of a hurricane or other natural disaster.
Several lawsuits have challenged this position, arguing that the risk of COVID-19 contamination constitutes physical damage and loss. For instance, one Louisiana restaurant argues in its case that the virus is “physically impacting public and private property” and “physically infects and stays on the surface of objects or materials…for up to twenty-eight days.” The restaurant further supports its claim for direct physical loss by claiming that “it is clear that contamination of the insured property by the Coronavirus would be a direct physical loss needing remediation to clean the surfaces of the establishment.”
Insurance companies have always had a financial incentive to find ways to deny claims submitted by policyholders. In the case of a life-altering global pandemic, insurance companies may need to find new ways to protect their bottom lines and may not want to set a precedent by approving COVID-19-related business interruption claims.
How a Lawsuit Could Help
If your claim was denied, attorneys working with ClassAction.org can specifically look at the language in your policy to determine whether the decision was correct. If not, they may be able to file a lawsuit on behalf of your company to help recover money to cover your losses.