Your Hotel or Travel Business Could Be Covered for COVID-19 Losses

Douglas and LondonCOVID-19 Business Interruption Insurance

Every industry has felt the impacts of the coronavirus pandemic, but some have been hit harder than others, suffering billions of dollars in losses. According to the President of the U.S. Travel Association, Roger Dow, COVID 19’s effects on travel “is six or seven times greater than the 9/11 attacks.”

In New York City, boutique hotels and major chains have sustained massive losses as a result of shelter-in-place orders, forced closures, and new travel restrictions. As the city enters Phase III of the COVID-19 trajectory, an estimated 20 percent of the city’s hotels and motels won’t re-open. In addition, establishments that have managed to stay afloat are dealing with low occupancy rates that only exacerbates the business interruption losses incurred during the crisis.

COVID-19 Impacts on the NYC Travel Industry

Many in the travel industry have submitted business interruption (B.I.) claims to cover the financial losses stemming from COVID-19. Still, there remains concern about the lack of clarity regarding policy language and exclusions. Insurance companies have argued that B.I. Insurance doesn’t apply to a pandemic, but this blanket statement is far from the truth for many policyholders.

Business Interruption policies are designed to cover the income losses, operating expenses, payroll, and other costs over a specific period– if the policyholder is forced to close due to a covered peril. As a hotel owner in the greater New York City metro area, you are encouraged to file a COVID-19 BI claim, regardless of your policy language, or pushback from your carrier.

Your Hotel or Business Could Be Covered for COVID Losses

Insurance companies stand to lose billions due to pandemic-related claims, including those involving civil authority coverage. In the months following the viral outbreak, insurers have been discouraging claims or outright denying losses for business interruption.

However, given the unprecedented nature of this global pandemic, and the growing wave of litigation against insurance companies for COVID-19 damages, there is a good chance they will end up having to pay their policyholders–regardless of “viral” exclusions. Legislators have been investigating ways to support impacted businesses in the travel industry and across the board.

In New York, Assembly Bill 10226 would require some commercial property insurance policies to cover business interruption during a state emergency due to the coronavirus pandemic. If passed into law, this legislation would force insurers to pay B.I. claims and void any clause that permits an insurer to deny coverage based on a microorganism or contagion.  Also notable is that the bill would require COVID-19 business interruption coverage even on policies that have expired.

The bill has the following restrictions on indemnification:

  • Applies to policies in force on or after March 7, 2020
  • Coverage is subject to policy limits
  • Issued to a policyholder with 250 full-time employees who work 25 hours or more per week

NYC Business Interruption Insurance Attorneys

If you have any questions about a COVID-19 business interruption claim in the greater New York City area (New York, New Jersey, Connecticut), contact Douglas & London for a free consultation.

A New York City business interruption insurance attorney will review your situation, and assist your hotel or travel business with legal matters regarding denied claims or bad faith lawsuits.  Let us advocate for the compensation you deserve– call our office for a confidential case review.

Additional Resources:

  1. National Geographic, How hard will the coronavirus hit the travel industry?
  2., Coronavirus Resources, and Information
  3. NYC Bar, Comments on Legislation Requiring Certain Perils Be Covered Under Business Interruption Insurance During COVID-19 Pandemic
COVID-19, Retailers, & Business Interruption Insurance in New York