Business interruption insurance helps companies replace lost income and cover expenses when a business is affected by a covered peril. This is a coverage most businesses hope to never need but nevertheless invest in it as a smart safety measure and perhaps for some peace of mind.
We are now in the midst of a pandemic and businesses are shut down everywhere. This is when business interruption matters. Unfortunately, when insurance companies face a barrage of insurance coverage claims all at once, that can create perverse incentives for them to deny claims.
The insurance companies have armies of lawyers—inside lawyers and outside law firms—working for them and their lawyers will comb through policy language and legal precedent and will interpret provisions in ways that might not support coverage. You don’t have to—and should not—take their word for it. You can trust what they say, but verify it. (Hopefully your insurer is not acting in bad faith, but if they are, there are remedies for that, too. For purposes of this brief note, we will start with trust and end with verify).
If you have business interruption insurance, you should level the playing field by consulting with counsel before you submit your claim so that you submit the best claim possible, knowing the legal precedent and understanding the nuances of the policy language. You also should act quickly so as not to be accused of failing to provide timely notice—delayed notice is one way that insurance companies can try to avoid coverage responsibilities.
If you’ve already been denied, all is not lost. You can take steps to pursue your rights. If you find yourself in a situation where you submitted a business interruption claim and were denied, I’d be interested in talking with you. Working with other lawyers and law firms, I am interested in making sure that people get the benefit of the insurance they bought, even if they have to fight for it.
Don’t let the insurance companies have the final word.
Trust and then verify.
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