New York City Coronavirus Contingent Business Interruption

Reeling from the impact of the coronavirus pandemic, business owners across New York City are struggling to stay afloat. Businesses deemed non-essential were forced to close down for several months, oftentimes with catastrophic results. Revenue halted, employees were fired or furloughed, and customer loyalty deteriorated.

It is unprecedented disasters like these that Business Interruption (BI) insurance was designed for. But the COVID 19 crisis has shown how insurance companies respond to the needs of their policy holders, who have faithfully paid their dues for years. Countless Business Interruption claims have been outright denied, citing policy language, or virus exclusions.

Was your Business Interruption Claim Delayed or Denied?

If your COVID 19-related BI claim was denied or is being delayed, it’s time to get experienced legal counsel. Don’t get discouraged by pandemic exclusions, or wait for new legislation to advance your claim. Call Douglas & London to speak with a New York City business interruption insurance lawyer. Our dedicated team has the knowledge and expertise to deftly navigate roadblocks and hold insurance companies accountable for fair payments.

Fight for the pandemic-related losses your business is entitled to, and reach out to Douglas & London for a free, no-obligation case review. Whether you need help understanding your policy, filing a claim, or pursuing litigation after a denial, our attorneys are ready to assist.

New York Contingent Business Interruption Insurance

Business Interruption coverage is designed to protect your business when it’s directly impacted by a natural disaster or peril that causes ‘physical’ losses.  In contrast, Contingent BI insurance covers the losses arising from disruptions to your supply chain. This might involve a logistics provider, a distributor, a vendor, or customers whose interruption directly undermines your ability to provide a service or product. This, in turn, creates a chain reaction, which negatively impacts your operations and bottom line.

Contingent Business Interruption coverage can help pay for continuing expenses such as rent payments, employee payroll, and other costs that accrue due to supply chain disruptions. Physical damages and losses are not required to pursue a contingent BI claim arising out of the COVID-19 crisis.

Contingent Business Income Explained

Contingent business income refers to revenue that is dependent upon the actions of a third party. Think of the example of a car dealership that sells a brand of vehicle made by a specific manufacturer. If the vehicle manufacturer is unable to transport the product due to coronavirus travel restrictions, the dealership would then go out of business.

In practice, contingent business interruption coverage would reimburse losses for the defined indemnity period in the following scenarios:

  • The policyholder relies on a single supplier or a few manufacturers for materials
  • The policyholder depends on limited vendors for the majority of its merchandise
  • The policyholder relies on a limited customer base to purchase the bulk of their products/services
  • The policyholder depends on a neighboring business, known as a ‘leader property,’ to attract customers

What Defines a Leader Property?

A leader property, by definition, is not owned, managed, or controlled by the insured policy holder.  If your business relied on a nearby commercial operation to attract customers by way of foot traffic or other means (as an example, think of a sports bar down the block from Yankee Stadium), and that operation unexpectedly shut down, CBI insurance is designed to mitigate that.

Extended Period of Indemnity

An endorsement for extended period of indemnity (EPI) adds supplementary coverage under the Business Interruption policy. Whereas Business Interruption coverage generally ends on the date the damaged property is restored, EPI extends this covered loss period for a set period of time.

This optional coverage allows policyholders to recover significant re-opening expenses, and the period can be extended based on individual needs. Most EPI endorsements will run for 30, 60, 90, 180 or 365 days.

New York City Contingent Business Interruption InsuranceLawyer

New York City business owners should take immediate steps to review their BI and CBI policy coverage. The courts may ultimately decide which factors trigger appropriate coverage for COVID-19-related losses.

Here at Douglas & London, we are committed to preserving policyholder’s rights, and helping business owners rebuild their livelihoods, one step at a time.

For sound legal guidance from a New York City business interruption insurance attorney, we invite you to schedule a private consultation today.