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COVID-19: Business Interruption FAQs

The State of California has recently set emergency measures that although they are meant to minimize the spread of COVID-19, the novel Coronavirus, they are creating chaos and interruption across all businesses in the state. Businesses looking for ways to mitigate their economic losses amid the closures and restrictions should consider taking a closer look at their insurance policies. Although the highlighted issues below provide different avenues for available recovery, it is important to remember that each solution will depend on the language of each individual insurance policy. Nonetheless, we hope that this guide provides a helpful insight for business owners in this difficult time.

  • How Do I Know If I Have Coverage for the Losses I Accrued During the COVID-19 Outbreak? This will greatly depend on the language set forth in your insurance policy. Currently, there is no general rule that determines which type of policy will cover these types of losses. There are certain policies that offer business interruption coverage. There are also other policies that offer coverage for the loss suffered through an order issued by a government entity, such as the emergency order that has restricted access to bars, restaurants, and other general public establishments. A skilled attorney who has insight on insurance coverage issues can help you make a determination.

  • What Is a Business Interruption Policy? Business interruption policies help businesses as a type of relief resulting from the financial hardship caused by these mandated closures. A business interruption policy can generally be used to cover the losses from an interruption to a business’ daily operation. These losses can include lost revenues or other expenses like payroll.

  • Is a Business Interruption Policy the Only Method In Which I Can Recover From the Losses I Have Accrued Amid the COVID-19 Outbreak? There are other forms of insurance that exist which can potentially extend to cover losses associated with the COVID-19 outbreak. For instance, there are certain policies that can provide coverage when the business interruption was caused by means of a Civil Authority.

For the most part, policies involving a Civil Authority will offer coverage in scenarios where access to the insured’s premises is prohibited or prevented by means of an order issued by a civil authority because of physical damage. Civil Authority orders include those issued by government agencies for business closures and business restrictions, such as the ones that have been issued by counties and cities across the State of California in the wake of the pandemic.

  • Will I Be Covered When My Insurance Policy States That I Have Civil Authority Coverage or Business Interruption Coverage? A Civil Authority coverage or a Business Interruption policy will oftentimes be restricted to scenarios where the access to a business was prohibited by means of property damage. Currently, there are efforts to include language in these emergency orders that state that the outbreak has caused property damage. With the success of these efforts, it will be possible for policyholders to obtain coverage. Based on the positive response from government officials, there is a high likelihood this will occur.

  • What Happens In the Event that My Policy Has “Virus Exclusions”? There are policies that contain certain exclusions for the losses that result from a virus, such as CODIV-19. It is important to note that these exclusions are far from absolute. Therefore, it is important to review the language of the specific insurance policy in order to confirm if there is coverage offered for the losses associated with COVID-19. Moreover, virus exclusions are usually added to policies through Endorsements. Endorsement numbers are usually CP 01-40-07-06. In the event the insurance policy includes this Endorsement, it is likely that getting coverage will be much more complicated.

  • Can I Contact My Insurer In Order to Make a Claim? It is critical to refrain from self-reporting claims for losses associated with COVID-19 without first speaking to a knowledgeable attorney. After reporting a claim, most insurance companies have claims adjusters who read off a script that ultimately leads down the past of coverage denial. Since COVID-19 and the mandated restrictions associated with them are highly complex, it is recommended that you do not attempt to navigate the situation without qualified legal guidance.

  • What Can I Do Next? In the event that your business has suffered a significant loss and accruing expenses as a result of the novel Coronavirus, it is important to seek the legal guidance of an attorney who is proficient in insurance coverage. The following are some tips you can keep in mind:

    • Obtain a copy of your policies. Unfortunately, many policyholders incorrectly assume that a declarations page is a policy. This, however, is the limits set to a policy. It is also important to know that there may be more than one policy applicable. As a result, it is important to contact the agent or broker from your insurance company in order to request by email a copy of all policies.

    • You shouldn’t depend on the coverage opinions provided to you by your agent or insurance broker. As a first line of defense, insurance agents and brokers will usually tell their clients that their losses will not be covered. Therefore, it is important to not rely on what they say.

    • It is important to maintain a record of all losses and/or expenses associated with the COVID-19 restrictions. These records should be accurately maintained and should include all operations, losses, expenses, and payrolls that have been accrued before and also after the commencement of this outbreak.

    • Document all communication with your insurance company. In the event that you have already been in contact with the insurance company, you should keep a log of the communications you’ve had with them.

    • Remain focused on your business operations. It is important that during this difficult time, you do what you can to help the continued operations of your company and remain vigilant of the health and overall well-being of yourself and your employees.

If you have any questions, concerns, or simply want more information, please feel free to contact us. This is a difficult time for many people across the world and you are not alone, the Law Offices of Justin H. King are prepared to help you through this challenging time.

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Melinda JordanMelinda Jordan
09:02 18 Dec 22
I went from feeling like a basket case from all the stress to feeling calm and collected after talking to Justin. He is a phenomenal personal injury lawyer and is a truly calming and reassuring presence. This firm helped me in ways I can't even adequately put into words, other than to say Thank You, Justin, to you and your awesome team.
Marjorie HarrisMarjorie Harris
04:14 18 Dec 22
After an auto accident, I felt really nervous calling an attorney because I had never worked with one before. But from the first conversation I had with Jessica, I felt so at ease. Justin then called me and was so easy going and we had a nice conversation too. The entire staff took great care of me and I am very happy.
Sheila HughesSheila Hughes
03:45 18 Dec 22
I was in a car accident that was not my fault two years ago. A friend of mine had a family member who had been helped in the past by Justin King, and they suggested I call him. I'm so glad I did! Justin and his team took great care of my situation and got a great settlement for me. I highly recommend them if you have been in an accident. You will be very happy with what this firm. They are smart, hard-working, honest, and take great care of their clients.
Margaret JamesMargaret James
04:43 01 Dec 22
Justin's entire staff is the best car accident lawyer team in Rancho Cucamonga. Justin, Oliver, Jessica, and Garrett all provided me with excellent service and treated me like family. They are all such great people, and always so honest and responsive to me. I gladly recommend them to anyone needing the services of a car accident lawyer in the Inland Empire.
Wm HollandWm Holland
06:13 17 Nov 22
When I needed a lawyer following a car accident on the Interstate 15 Freeway in Rancho Cucamonga, Justin King, and his team were there for me. I appreciated how his entire staff always seemed happy to answer my questions and were so good about returning all my phone calls and emails. I could tell this firm has immense experience in helping people get their life back after an unfortunate car crash. I was so happy with the outcome of my case and the results Justin obtained from the insurance company on my behalf. I have recommended their office to all my family members and neighbors. I hope you never need to call them. But if you need the best car accident lawyers, I can vouch that they are excellent.
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Melinda JordanMelinda Jordan
09:02 18 Dec 22
I went from feeling like a basket case from all the stress to feeling calm and collected after talking to Justin. He is a phenomenal personal injury lawyer and is a truly calming and reassuring presence. This firm helped me in ways I can't even adequately put into words, other than to say Thank You, Justin, to you and your awesome team.
Marjorie HarrisMarjorie Harris
04:14 18 Dec 22
After an auto accident, I felt really nervous calling an attorney because I had never worked with one before. But from the first conversation I had with Jessica, I felt so at ease. Justin then called me and was so easy going and we had a nice conversation too. The entire staff took great care of me and I am very happy.
Sheila HughesSheila Hughes
03:45 18 Dec 22
I was in a car accident that was not my fault two years ago. A friend of mine had a family member who had been helped in the past by Justin King, and they suggested I call him. I'm so glad I did! Justin and his team took great care of my situation and got a great settlement for me. I highly recommend them if you have been in an accident. You will be very happy with what this firm. They are smart, hard-working, honest, and take great care of their clients.
Margaret JamesMargaret James
04:43 01 Dec 22
Justin's entire staff is the best car accident lawyer team in Rancho Cucamonga. Justin, Oliver, Jessica, and Garrett all provided me with excellent service and treated me like family. They are all such great people, and always so honest and responsive to me. I gladly recommend them to anyone needing the services of a car accident lawyer in the Inland Empire.
Wm HollandWm Holland
06:13 17 Nov 22
When I needed a lawyer following a car accident on the Interstate 15 Freeway in Rancho Cucamonga, Justin King, and his team were there for me. I appreciated how his entire staff always seemed happy to answer my questions and were so good about returning all my phone calls and emails. I could tell this firm has immense experience in helping people get their life back after an unfortunate car crash. I was so happy with the outcome of my case and the results Justin obtained from the insurance company on my behalf. I have recommended their office to all my family members and neighbors. I hope you never need to call them. But if you need the best car accident lawyers, I can vouch that they are excellent.
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