Philadelphia Business Interruption Lawyers

Business Interruption Claims

We are living in unprecedented times due to the rapid and global spread of the coronavirus and COVID-19. With people being instructed to stay in their homes for weeks or even months, businesses in every industry are buckling under the sudden and massive loss of consumer-based revenue.

Insurance Coverage for Coronavirus Related Slowdowns, Lockdowns & Quarantines

Businesses with business interruption insurance policies may be able to endure the minimized economy, though. Golomb Legal in Philadelphia can help make the most of this specific type of insurance coverage. Our business interruption attorneys have extensive experience dealing with major insurance companies and representing clients in wide-scale consumer class actions.

Make our experience your advantage by contacting us at (215) 278-4449 today.

What is Business Interruption Coverage?

Business interruption coverage typically indemnifies for loss of revenue that would have been earned had there been no business disruption and the continuing normal operating expenses incurred during the time it takes to restore the damaged property. As with many natural disasters, 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 how insurance companies will handle coronavirus-related claims.

Our attorneys anticipate insurers will immediately deny all business interruption claims on two grounds:

  • Firstly, coverage applies when the policyholder suffers “direct physical loss of or damage to” insured property as the result of a covered cause of loss. Without “physical damage” from a covered cause, business income loss is usually excluded.
  • Secondly, many commercial property policies contain a specific exclusion for “Loss Due to Virus or Bacteria.” Insurers will undoubtedly point to this provision as an exclusion to coverage.

Who Has Business Interruption Insurance?

What businesses typically have business interruption insurance coverage?

  • Restaurants: One of America’s favorite pastimes is going out for a meal with friends and family. The coronavirus quarantine has halted that activity entirely, forcing eateries to try to make sales through delivery and carryout. Even popular restaurants are struggling to make a profit, though, especially since their patrons are cutting costs wherever they can.
  • Bars: The situation is even more difficult for bars, who essentially cannot convert any of their services to delivery or takeout. Removing alcohol from the premises of a bar is illegal.
  • Retail stores: Only a few types of retail stores have been permitted to continue business during the pandemic, such as home supply stores. Most others have been ordered to close their doors and only accept orders through online channels.
  • Shopping malls: The difficulties that retail locations face are exacerbated for shopping malls. Even if there are essential businesses inside a mall, the entire structure must remain closed due to the inherent risk of bringing numerous people together in one place.

The landlords who own affected retail spaces are also being severely impacted by the business interruptions caused by the coronavirus. The businesses that hold tenancy at their commercial properties cannot afford to pay their rent, which means landlords are also not collecting regular income. Golomb Legal fights diligently for our clients because we know we are also helping the people who rely on them to succeed.

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.

Civil Authority Orders

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.

Get Answers & Legal Guidance Today

Whether or not your business can make a claim for business interruption coverage during the coronavirus pandemic depends heavily on the details and the cooperation of your insurance provider. Our Philadelphia business interruption attorneys can help you understand your policy, file a claim, or take your insurer to court if they try to renege on your insurance contract. We are already bringing actions on behalf of restaurant clients who have been shorted by their insurers, and we would like to see if we can provide the same level of legal support for you as well.

We can review your business insurance policy for free and at no obligation. Just contact us at (215) 278-4449 to begin.

Continued Reading

Be sure to visit our blog soon for a continued discussion on other potential coverage clauses in your policies, including Civil Authority and Contingent Business Interruption coverage.

Frequently Asked Questions

If you are a business owner, you likely have questions about how business interruption insurance claims work.  Our law firm is prepared to help you in this time of need. Here are some questions that we get regarding business interruption claims. Contact us today if you need assistance with your coronavirus related insurance claims.
  • What Does Business Interruption Insurance Cover?
    Business interruption insurance coverage replaces business income lost in the event that business is halted. This type of insurance also covers operating expenses, a move to a temporary location if necessary, payroll, taxes, and loan payments. Business interruption insurance essentially helps companies return to normal operations after the business is halted.
  • My Broker or Agent told me there won’t be coverage, what should I do next?
    The first thing all policyholders should do is request their entire insurance policy and review it. If you are unclear what your insurance covers, we will review it free of charge.
  • I was told that a lack of “physical damage” precludes coverage – what does that mean?
    In most commercial property insurance policies, business interruption coverage is triggered when the policyholder sustains "direct physical loss of or damage to" insured property by a covered cause of loss. In the event of a claim for coronavirus-related business interruption, insurance carriers have almost universally decided that this "physical damage" requirement has not been met. We disagree. This pandemic has rendered property uninhabitable or otherwise unfit for its intended use. Courts across the country have not settled upon a uniform rule for when insured property has suffered a "physical loss." We believe these unprecedented events are sufficient to trigger business interruption coverage. At a minimum, this introduces a question of fact for a judge or jury to decide.
  • I was told that my Policy includes a “Virus Exclusion” – does that preclude coverage?
    The insurance industry adopted the “Exclusion of Loss Due to Virus or Bacteria” in the aftermath of the SARS epidemic of 2003 in response to carriers’ concerns that viral epidemics could increase their exposure to business interruption claims. Insurers have already pointed to this provision as an exclusion to coverage. However, your losses may be the result Civil Authority Orders or the fear of contamination. Already, state governments like the Pennsylvania Legislature are considering a bill to force insurers to ignore virus exclusions in policies.
  • So what happens if the government takes action?
    It’s always hard to predict what will happen down the road in any litigation, let alone a large and complex case like this one. Undoubtedly, outside influences like the Federal or state government may affect the outcome of this case as it will be necessary for both the insurance companies and various governments to participate in an ultimate resolution. That is why it is important to have lawyers like those at GH that are not only skilled, experienced lawyers in complex cases but have experience negotiating with Federal and State governments at the highest levels.

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