Can I Claim on My Business Interruption Policy If I Rent or Lease?
If your company was shut down because of the pandemic and you have a business interruption (BI) policy, it does not matter whether you rent or lease the premises. Typically, damage to the premises triggers a business interruption claim, but insurance companies are balking at covering closures due to the pandemic.
Perhaps your insurance agent told you not to bother filing a claim. This denial has nothing to do with whether your property is leased or rented. Insurance companies are denying BI claims due to COVID-19, but that does not mean you should not file. In fact, you must file such a claim if you wish to bring a lawsuit against your insurer, and you must do it immediately.
The pandemic has devastated countless businesses and entire industries. A New York City business interruption insurance lawyer at Douglas and London will evaluate your policy, draft claims, and pursue litigation as necessary. We strive to receive the maximum compensation for your damages.
Business interruption insurance covers loss of income due to physical damage to the insured premises. In normal situations, that may include damage due to fire, hurricanes, tornados, and other natural disasters, such as earthquakes. Coronavirus does not cause that type of property damage per se.
However, there are physical costs associated with the pandemic that may fall under the property damage rubric. These include the expense of cleaning and sanitizing the building or making improvements such as installing barriers and other ways of enforcing social distancing.
Courts have previously found that if a property cannot be used for its intended purposes because of an underlying contamination or hazard—it constitutes physical damage. Cases exist in which property damage is considered when it is dangerous to use the premises– even when the damage has not yet occurred. The contamination must render it uninhabitable. However, these cases have not been applied to the coronavirus.
Commercial insurance policies, of which business interruption insurance is a part, may use a great deal of standard language, but every policy is unique. And many of them specifically exclude viral or bacterial contamination. Yet, as we see in the above, there are other aspects of the policy that may provide you with coverage.
If a policy is written for a specific industry, such as retail or healthcare, it may include coverage for communicable diseases. This is not offered in standard commercial insurance policies, and it is virtually impossible to purchase– outside of a few industry exceptions. In other words, if you wanted to buy insurance to cover your business in case of a disease outbreak, you could not do so.
BI insurance coverage is still evolving
Before late 2019, COVID-19 had little or no human transmission. Now it has spread globally, leaving economic destruction in its wake. Legal and insurance matters involving COVID-19 are still evolving, and your lawyer will keep you informed as litigation or legislation occurs which may affect your claim.
At Douglas and London, we will review your insurance policy carefully and advise you on your options. These options may include joining a class-action lawsuit.
Contact us for a free consultation
Schedule a free, confidential consultation by completing our online form or calling or texting us 24/7. Bring a copy of your entire insurance policy, not just the declarations page, to the meeting. If you do not have access to the whole policy, notify your insurance company and they will provide one. You may also want to bring a copy of your rental or lease agreement.
All of our pandemic-related cases are taken on a contingency basis, so you pay nothing unless we win. We serve not only the New York City area, but clients across the country. Hablamos Español.