Wolterman Law


Your Business Interruption Claim May Be Covered (Even If Your Insurer Has Denied It)

COVID-19, commonly known as the Coronavirus, has caused worldwide business disruption. Many businesses have lost, and will continue to lose, significant income and incur other business interruption losses. You might be wondering if your business interruption insurance, normally part of a larger property insurance policy, will cover your losses. Most insurers are routinely denying business interruption claims by misrepresenting that the Coronavirus does not constitute physical loss or damage. They are also denying claims for business interruption under the "civil authority" provisions of policies claiming no physical loss was present outside of the insured's property, despite civil orders requiring businesses to close. Insurers are routinely making other misrepresentations surrounding business interruption claims.

Do not take your insurer's word that your policy will not cover business interruption losses.

Business interruption insurance coverage depends on your policy's terms and the circumstances surrounding the loss experienced by your business. If your policy does not exclude damage by a virus, for instance, your business has a strong argument that coverage should extend to the coronavirus.

Even with business interruption policies with no virus exclusion, insurers are routinely denying business interruption claims when insureds file the claim themselves. Having an attorney experienced in insurance coverage litigation on board early in the business interruption claim process is critical. We can help.
  • properly frame and provide documentation for the proof of loss not just for the business interruption claim but also the civil authority claim, extended business income claims, dependent property claims, property damage claims, contingent business interruption claims, and other related business interruption claims;
  • set forth the legal authority, including case law, for why the coronavirus constitutes a direct physical loss invoking business interruption coverage;
  • clearly set forth in writing the extra-contractual risks to the insurer such as bad faith liability and responsibility to pay the insured's attorney fees if the insured wrongfully denies coverage;
  • document in detail the lost business interruption income and expenses for the insurance claim file;
  • meet all deadlines in the claim process as required by law and the policy;
  • to clearly set forth and monitor the insurer's responsibilities and obligations under Fair Claims Settlement Practices laws and policies, including insurer's responsibilities to meet deadlines and conduct adequate investigations;
  • to persistently communicate to the insurer in writing the urgency of the business interruption claim and the risk to the business during this pandemic, and
  • to be willing to escalate the matter with legal action.
If your business interruption claim has been denied, if you have been issued a reservation of rights letter, or if your insurer is delaying acceptance or investigation of your business interruption claim, please contact Wolterman Law Office. In many states, including Ohio, insurers are required to pay an insured's attorney fees if they wrongfully deny business interruption coverage. We are accepting certain of these cases on a contingency fee basis, meaning you do not have to pay us unless you are paid by the insurer.

Do not hesitate to contact us at (513) 488-1135 for a free consultation and review of your policy.

Be Careful Relying on Potential State and Federal Legislation Concerning Business Interruption Insurance

Several states, including Ohio, have proposed legislation to require insurers pay business interruption claims arising out of the coronavirus and mandated closures. (See Ohio House Bill 589). Even if this legislation passes it would inevitably be challenged as unconstitutional, meaning years of litigation before businesses would be entitled to collect their business interruption coverage, if at all. The Supreme Court would likely find such legislation as currently proposed unconstitutional, leaving businesses emptyhanded unless they pursue claims individually.

The insurance industry supports implementation of a federal government relief fund to cover portions of business interruption insurance. In past disasters, those types of relief funds proved to be slow and inadequate to cover full losses. They also, in some cases, provided insurers immunity for wrongfully denying valid claims. Which is one reason among many the insurers favor them.

Business interruption coverage arising out of this pandemic is complex, and, we believe, ill-suited for a federal relief program or any other legislation. Aside from the myriad different policy terms that may or may not trigger coverage, battles will be fought over the length of coverage and amount of coverage. This will implicate legal doctrines concerning causation and collateral sources of funding and recovery, among others, that cannot be dealt with through legislation. These battles must be fought and determined on a case by case basis. Further, insurance is regulated at the state level, meaning litigation over business interruption coverage will proceed in each state. Ohio insurers (and courts) are not required to follow a ruling on business interruption in, for example, California. All of these reasons make it important for businesses to make business interruption claims and fight for them on an individual basis.

Due to the unprecedented complexity of business interruption insurance your policy should be reviewed and evaluated by legal counsel experienced in insurance coverage litigation. Wolterman Law Office is eager to assist businesses and individuals affected by the economic fallout resulting from the Coronavirus. Call us at (513) 488-1135 today for a free consultation.

Aside from business interruption coverage, the coronavirus has given rise to other legal issues, including:
  • Guidance on whether your business is an "essential business"
  • Direction on the SBA's Economic Injury Disaster Loan Program, and other federal and state programs available to small businesses affected by the Coronavirus
  • Coronavirus-related contract disputes and strategies for resolutions
  • Force Majeure and other relevant clauses in contracts
  • Premise liability for Coronavirus outbreaks
Wolterman Law Office is eager to assist businesses and individuals affected by the economic fallout resulting from the Coronavirus. Call us at (513) 488-1135 today for a free consultation.

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Wolterman Law Office LPA

Wolterman Law Office LPA provides legal counsel for clients in Hamilton County, Warren County, Clermont County and Butler County in Southwest Ohio, including communities such as Loveland, Cincinnati, Mason, West Chester, Blue Ash and Milford.

434 W Loveland Ave
Loveland, OH 45140

Phone: 513-488-1135
Fax: 513-322-4557

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