Has Your Business Interruption Insurance Been Denied Due to Covid-19? Here’s How MyPhillyLawyer Can Help

By Dean I. Weitzman, Esq. on June 5th, 2020

The COVID-19 pandemic has affected everyone since state stay-at-home orders were put into effect in mid-March as government authorities began working to try to stop the spread of the deadly disease. 

The situation has also been difficult for retail and professional businesses that were forced to close unless they were deemed “essential,” which includes grocery stores, gas stations, hardware stores and vehicle repair operations. Millions of workers have been laid-off, furloughed or fired due to the closures.

For business owners, the aftermath has been incredibly difficult as they work to figure out how to survive until things eventually return to normal, and they can once again have customers and employees back in their stores.

For those business leaders, many have been thankful for their business insurance policies, which they thought would help them whenever an emergency struck.

Well, the emergency sure did strike as COVID-19 continues to unleash its massive damage to people and businesses, but business owners have been striking out when they’ve contacted their business insurance companies to try to file claims against their policies.   

And that’s just not fair.

Here at MyPhillyLawyer, we have a growing number of clients who have been contacting us to ask for help when their business interruption insurance claims are being brushed off by insurance agents. Worse, the agents aren’t even writing such claims and filling out the paperwork. They are just summarily telling policyholders that such claims are not covered under their policies, without even a review process.

One MyPhillyLawyer client owns a bridal shop that specializes in dresses for brides and for proms. She’s been down and out now for the last 3 months. This time of year is her season, her time to make lots of sales and bring in needed profits for her company.

But she hasn’t been open since the March shutdowns were ordered. Her bridal shop isn’t shut down due to the virus, though. It’s closed because the government said she is not allowed to open.

We reviewed her general liability and business insurance policy and its contract language. If you own a business, you have something similar, and that policy typically includes business interruption coverage.

That means if you have a fire, flood or other disaster that harms your business, shutting it down for months or more, that you can file a claim and recover damages for lost sales and profits, physical damage, on-going rent or mortgage payments and more while you get things back into order for a reopening.

But today, as COVID-19 keeps many businesses shuttered, the insurance companies are already trying to weasel their way out of helping policyholders by arguing that they don’t have to pay coronavirus business disruption claims because there has been no physical damage due to the closures.

What the insurance companies uniformly continue to argue, is that businesses must have some sort of event that would close their operations to be eligible for coverage.  

Except their policies don’t actually say that in those words. Instead, that’s how they are trying to interpret their policies to their advantage. It’s like a car crash claim that they don’t want to pay. They just come up with reasons to reject it.

In contracts, ambiguity is interpreted by the courts against the person who wrote it. That’s the way the law is written. Ambiguity is seen by the courts in favor of the insured plaintiffs, in the case of business interruption insurance. 

Unless an insurance company drafts a policy contract specifically expecting this coronavirus scenario, then the contract should be interpreted against them.

And while some insurance policies have specific exclusions for viruses, they don’t apply in these cases. Businesses have not shut down on their own due to the virus but were instead ordered to shut down by the government. Had the governments not shut them down, they could have kept their doors open to potential sales.

If the contract is written by an insurance company that only says viruses are not covered, then I’d say that’s ambiguous. These businesses were shut down because of governmental actions, not the coronavirus itself.

In these cases, we think we will be successful in battling for our clients.

For the insurance companies, this is a huge problem. For them, the COVID-19 crisis could be compared to everyone in the United States having car accidents at the same time, causing a huge tide of cases, payouts and chaos.

That’s likely why insurance companies are giving our clients and plaintiffs around the nation such a hard time over their business interruption claims today.

They know that if they have to pay out all of the business interruption claims that are starting to come into their offices that this will end up being the largest insurance claim event in the history of the country and will likely apply to almost every single business.

I suspect that the insurance companies will ask the government for assistance once they realize that they’re going to have to pay these claims, and that will eventually be heard by the courts through multidistrict litigation which will set national rules and standards for such cases. I wouldn’t be surprised if there is an eventual government bailout to help the insurance companies through this.

But even as some business are starting to reopen around our area and around the country, many more are continuing to stay closed due to concerns about having too many people packed together too tightly, which could continue to spread the virus. That includes restaurants, retail stores and more. Many of these businesses remain closed until Pennsylvania goes to green on the coronavirus warning scale set by the commonwealth.

That’s why business owners need to be moving right now to speak with their attorneys about filing business interruption claims against their insurance policies so they can work to get the money they need to sustain their businesses through this crisis.

MyPhillyLawyer is taking these cases on a contingency basis, which means there are no upfront costs or fees to our clients unless we make a recovery from their insurance companies.

Insurance companies are doing what they always do – attempting to get out of paying legitimate claims for their policyholders. Insurance companies are all about profits and not about making claims payments to the people who are paying their insurance premiums.

The insurance companies should be talking to their policyholders, taking their claims and going through the process, instead of just telling them such claims won’t be covered and refusing to even fill out the paperwork. 

They’ve instead told business owners that they shouldn’t even make such claims because they won’t pay them. That’s ridiculous, unfair, and spitting in the face of paying policyholders.

I’m telling our clients to keep filing their claims until they force their insurance companies to accept such claims, which will also create a chain of evidence to establish their claims histories.

MyPhillyLawyer is in this fight, and if you need our help, we are here. If you have filed or attempted to file a business interruption claim with your insurance company during the pandemic and are getting nowhere, the attorneys at MyPhillyLawyer have extensive experience enforcing business owners’ rights under their insurance policies. We have decades of collective experience holding insurance companies to their obligations, and standing up for the rights of businesses as well as individuals who have been injured in all types of personal injury accidents. To learn more, call 215-227-2727 locally or toll-free at 866-907-2231. You can also fill out our online form and an experienced attorney will reach out to you as soon as possible.

When Winning Matters Most, Call MyPhillyLawyer.

Listen to Court Radio every Sunday at 7 a.m. with me, attorney Dean Weitzman of MyPhillyLawyer, on Philadelphia’s Old School 100.3 WRNB, Boom 103.9 or on Classix 107.9 WPPZ FM. Listen to Court Radio online or on the radio every week for the latest on legal topics and to get answers to your legal questions. In addition to addressing the topical issues of the day, we’ll answer caller questions on a wide range of legal issues.