Just when it seemed as though things couldn’t get any worse, many small business owners in Tallahassee and across the Nation are finding out that insurance companies are refusing to provide coverage for this economic slowdown even though the insurance policies (i.e., contracts) that they wrote say that they’re supposed to. Many small business owners have been paying a lot of money every month in insurance premiums for business interruption insurance policies, which are sometimes also called business continuity insurance policies. Regardless of which name is used, these policies provide coverage to businesses if they’re forced to shut down due to a natural disaster like a hurricane, tornado, fire, or a pandemic. These policies are supposed to replace the business’ income during the shutdown by covering their expenses, such as payroll, rent, loan payments, etc. That way the business will have enough money to pay all of its monthly bills during the shutdown so that when the time comes to open back up again the business is actually able to resume operations. The entire point of these policies, and the entire reason why businesses have been paying so much money every month to have this coverage, is to prevent bankruptcy.

Don’t Let Insurance Companies Take Advantage of You

Many businesses have what are known as “all risk” policies or “all coverage” policies, which means that the policies are required to cover losses arising from any fortuitous cause except those that are specifically excluded. And, many of these polices do not contain any exclusions that come even close to excluding a pandemic caused by a virus. So, for these business owners, there should be no question that they’re covered right now. But, when these business owners submit claims, the insurance companies are responding by sending out denial letters and essentially saying, Oh we didn’t mean that…that’s not what the policy language really means…we’re going to fight this.

Other business owners have all risk policies containing exclusions which say they don’t provide coverage for losses caused by bacteria. But, as many of us already know or have recently learned, a virus is very different than bacteria. And, these exclusions are very clear. The policy language doesn’t say “bacteria or virus”; it just says “bacteria.” So, there should also be no question that these business owners are covered right now too. But, as I type this, insurance companies are relying on this exclusion to deny claims.

And, insurance companies are denying claims under both types of policies despite the fact that the government told these small businesses that they must shut down because this is a public health crisis, which strengthens the argument that the insurance companies are required to provide coverage right now. Unfortunately, this behavior by insurance companies is not new; it’s the same old game that they play all the time, like with claims stemming from the BP Oil Spill and Hurricane Michael.

How We Can Help You Win Against the Insurance Company

During the lawsuits that will ensue from these claim denials, we expect to see the defense attorneys attempt to defend the insurance companies’ position by arguing some ridiculous reinterpretations of the policy language. Most of these lawsuits will likely end up in federal court due to diversity jurisdiction where a judge, not a jury, will decide whether or not the insurance companies are required to provide the coverage that they promised to provide years ago when they entered into the contract with the small business owner. So, we also expect to see some judges who will always call it fairly and other judges who will always side with insurance companies and big business.

Concerningly, talking points are currently being circulated in the insurance community which some insurance agents are using to discourage people from making claims. But, if you’re a small business owner who is shut down right now because of COVID-19 and you have one of these polices, you cannot give up, because that’s exactly what the insurance companies want you to do. Instead, submit your claim, wait to receive the denial letter from your insurance company, and then send us a copy of your entire policy and a copy of the denial letter and we’ll analyze your specific situation and provide you with our opinion about the options that are available to you free of charge. This is a unique situation, so if you’re going to hire an attorney, it’s extremely important that you find one who has specific experience handling business interruption insurance claims. If you need help with a claim against your insurance company, contact the Tallahassee Insurance Lawyers today at Barret Nonni & Homola for a free consultation about your case.