Business Interruption Claims
1063 Park Avenue, Orange Park, FL 32073 ~ (904) 682-9512 ~ www.johnfagan.com
WE ARE OPEN! Fortunately, at Accident Lawyers John Fagan, we have been able to remain open during this COVID-19 pandemic. Others, however, have not been so fortunate. Many businesses have voluntarily shut their doors, others have been forced to do so.
Many businesses have what’s called “Business Interruption Insurance.” Still, insurance companies are doing their best to deny coverage of these claims to policyholders
This is why we are currently accepting Business Interruption Insurance cases. We represent people on a contingency fee basis. This means we don’t get paid until you do. Read more below about Business Insurance and how we can help file your claim.
BUSINESS INTERRUPTION COVERAGE
In Florida, a state heavily reliant on tourism, we have seen substantial hardship amongst hotels, restaurants, medical centers, and many other businesses due to COVID-19. The commercial insurance policy you have been paying may cover the financial shortfalls, but as we all know insurance companies tend to get picky when it comes to covering claims. We see this a lot with hurricanes, earthquakes, and floods, and the same can be expected with coronavirus-related claims.
At Accident Lawyer John Fagan, we anticipate Insurers will deny these business interruption claims. This is why we want to review your policy, even if it contains an exclusion for pandemic-related losses. The case law relating to this area is evolving. Thus, there is a chance your policy may cover financial losses related to the Coronavirus.
Several states are pondering legislation to force insurance carriers to cover COVID-19 business-related loss regardless of any exclusion stating otherwise. That’s why it is imperative you act now and get in line for the possibility that your claim may result in a settlement.
LOSS TYPICALLY COVERED BY BUSINESS INTERRUPTION INSURANCE
- Projected Unearned Profits
- Temporary Business Re-Location Costs
- Employee Wages
- Unforeseen Expenses, Beyond Fixed Costs, Such as Re-Training Expenses
- Operating Expenses and Other Fixed Costs, including Replacement Machinery
- Financial Losses Caused by Government-Mandated Closure of Business Premises Under a Civil Authority Order
- Business Taxes
- Loan Payments
WHY YOUR POLICY SHOULD BE RESPECTED
There are already clear and viable counterpoints to these arguments. The first being that the coronavirus has caused damage to physical surfaces throughout businesses, just in a unique way. Rather than destroying the surfaces outright, the coronavirus renders them untouchable and unusable until they are restored, i.e. cleaned thoroughly or replaced, both of which cost time and money.
Since your losses may be the result of Civil Authority Orders, such as a shelter-in-place order that keeps consumers out of your storefront, new legislation is in the works to try to offset the unintended losses caused by the public’s fear of contamination. Several states are already drafting bills that would invalidate ‘virus exclusion clauses’ in business interruption policies. If such bills are able to pass, then many, many more business owners will have a valid claim to business interruption coverage that may help them stay open until quarantine orders end.
EXTRA EXPENSES COVERAGE
Extra Expense Coverage allows for you to recover the necessary expenses you incur during the “period of restoration” that you would not have incurred if there had been no direct physical loss or damage to your property caused by or resulting from a Covered Cause of Loss. An insurance company will pay the extra expense to (1) avoid or minimize the “suspension” of business and to continue operations at the described premises or at replacement premises or temporary locations, including relocation expenses and costs to equip and operate the replacement location or temporary location, and (2) minimize the suspension of business if you cannot continue operations. Losses that may be covered due to COVID-19 include:
- Additional security to protect the business property during a time of social turpitude
- Advertising costs to resume business
- Disinfectant efforts to ensure the premises is safe
- Relocation costs, potentially including those costs associated with equipping employees to work from home
Insurance companies will hotly contest these claims in litigation proceedings to come. Triggering such coverage means their actual loss of Business Income incurred during the period when the property is repaired, rebuilt, or replaced and operations are resumed. Such coverage ends on the earlier of:
- The date you could restore your operations, with reasonable speed, to the level which would generate the business income amount that would have existed if not direct physical loss or damage had occurred;
- Sixty (60) consecutive days after the date determined above
This coverage may run consecutively with the Civil Authority coverage mentioned above. This means that a court may determine you can collect Extended Business Income even after having collected losses under the Civil Authority portion of your policy. This will be litigated around the county as courts have drawn different conclusions about this issue.
CIVIL AUTHORITY COVERAGE
You may also be covered for losses suffered as a result of “Civil Authority”. Civil Authority applies when there is an order or action issued or taken as a result of (a) physical loss or damage or (b) perils insured against to property adjacent to the nsured premises or within a certain distance thereof, which prevents, prohibits, or impairs access to the insured premises.
When a covered cause of loss causes damage to property other than property at the described premises, the insurance company will pay for the actual loss of Business Income you sustain and the necessary extra expenses caused by action of civil authority that prohibits access to the described premises provided that 1) access to the area immediately surrounding the damaged property is prohibited by civil authority as a result of the damage, and the described premises are within that area but are not more than one mile from the damaged property and 2) the action of civil authority is taken in response to dangerous physical conditions resulting from the damage or continuation of the Covered Cause of Loss that caused the damage, or the action is taken to enable a civil authority to have unimpeded access to the damaged property.
Courts have interpreted the civil authority provision as not requiring physical damage to property in order to trigger coverage. Such coverage may instead be triggered when such an order or action, such as a “stay at home” or “safer at home” or a curfew, causes a business interruption, which in turn, resulted in financial loss.
When deciding whether Civil Authority is triggered, it is imperative to look to your state and local orders which should state the purpose for the order, such as Broward County [FL] Administrator’s Emergency Order 20-01, enacted on March 22, 2020, which states that the “emergency order is necessary because of the propensity of the virus to spread person to person and also because the virus is physically causing property damage due to its proclivity to attach to surfaces for prolonged periods of time.”
The governor of Florida also issued at statewide “stay at home” order that went into effect April 3.
Civil authority coverage for business income will begin 72 hours after the time of the first action of civil authority that prohibits access to the described premises and will apply for a period of up to four consecutive weeks from the date on which such coverage began.
Civil Authority Coverage for Extra Expense will begin immediately after the time of the first action of civil authority that prohibits access to the described premises and will end upon the later of:
- Four(4) consecutive weeks after the date of that action, or
- When your civil authority coverage for business income ends