What is a “Loss of Market” Exclusion?
A loss of market exclusion in a commercial insurance policy refers to economic changes occurring due to competition or customer tastes. The insurance companies are known to interpret loss of market exclusion very broadly. In general, a loss of market exclusion means the insurer will not pay damages for delay, loss of use, or loss of market.
Some carriers argue that losses due to shutdown and lack of business fall under a loss of market exclusion. It is simply insurance companies doing what they have always done but on a larger scale. The entire business model is based on denying as many claims as possible and paying out the minimum for approved claims.
Since the pandemic began shuttering thousands of New York City businesses, insurance companies have refused to pay for COVID-19 related claims. In fact, some insurance company representatives are simply telling clients they are not covered and not to bother filing a claim. This is incorrect.
To file a civil lawsuit against the insurance company, it is first necessary to file a claim. If you have not yet filed a claim for business interruption (BI) insurance coverage, do so at once. Once the claim is denied, seek legal counsel.
The pandemic has changed the world as we all knew it. A New York City business interruption insurance lawyer at Douglas and London will protect your rights and fight your insurance company so that you receive the compensation you deserve.
Loss of Market Exclusion
Typical wording for a loss of market exclusion may read, “This policy does not insure against loss or damage caused directly or indirectly by loss of market.”
However, many policies do not define the “market” when referring to this exclusion. The word has various meanings, including the geographic area served by the business or specific potential buyers. If the insurance company begins using different terms for what specifies a market, your lawyer will raise the issue of ambiguity in the definition.
Simply put, loss of market exclusion, along with similar exclusions found in policies, should not preclude coverage for pandemic-related losses if customers are no longer purchasing these goods or services precisely because of the COVID-19 pandemic.
BI Insurance is usually based on damage to the premises
Moreover, it is the pandemic that is causing the business’ losses for which the policyholder seeks coverage. Yet, insurers are arguing the economic fallout resulting from the pandemic is not covered under the loss of market exclusion or business interruption insurance per se.
BI insurance is usually based on physical damage to the premises, which does not occur with coronavirus. Legislation has been introduced in New York, New Jersey, and other states that would force insurance carriers to cover coronavirus-related losses. Still, none of these bills have passed and are fiercely opposed by the insurance industry.
Contingent Business Interruption Coverage
If the policy contains contingent business interruption (CBI) coverage, the policyholder may receive compensation due to the collapse of their supply chain during the pandemic. Insurers are also denying COVID-19 CBI claims as if they fell under the loss of market exclusion.
Loss of market exclusion should not apply to policyholders when the issue involves distribution or supply change problems preventing the business from getting its products to customers.
If your policy includes CBI coverage, it may prove easier to receive compensation than under a standard business interruption policy.
Contact us at Douglas and London for a free consultation
If your business interruption insurance claim was unfairly denied by your insurer, a New York City business interruption insurance lawyer at Douglas and London can help. We are at the forefront of assisting businesses devastated by the pandemic and their insurers’ failure to honor claims.
Arrange a complimentary and confidential consultation by calling or texting 24/7 or submitting our online form. Bring your complete insurance policy, not just the declarations page, to the meeting. If you do not have the complete policy, your insurance company will provide a copy. After reviewing your policy, we will discuss your options, which may include participating in a class-action lawsuit.
Finally, we file COVID-19 business interruption claims on a contingency basis, so you pay nothing upfront. There is never a fee unless you receive compensation. Hablamos Español.