Due to COVID-19, businesses across California and the US are facing unprecedented challenges to their operations and indeed, many small and medium-sized businesses have been forced to shut their doors permanently. While some businesses in California have been able to weather the challenges and are starting to consider a soft re-opening, concerns about employee and customer safety and new government regulations, restrictions, and shutdowns abound. Businesses in every industry and size are questioning where they can go from here and, due to these previously inconceivable interruptions in their business, when or if their insurance policy comes into play.
Business Interruption Insurance
“Business interruption” insurance is intended to compensate the business owner for the revenue lost during a specific period. In the business context, we most often see three types of business interruption insurance:
- “Business interruption” insurance – intended to compensate the insured for the income lost during the time period of interruption resulting from disaster or the time necessary to repair or restore the physical damage to the covered property.
- “Extended business interruption” – limited time coverage for income lost after the property is repaired but before the income returns to its pre-loss level.
- “Contingent business interruption” – coverage for the insured’s loss of income resulting from physical damage, not to its property, but to the property of providers or suppliers on the one hand or consumers of its product or services on the other.
Additionally, your business interruption insurance policy could speak directly to losses attributable to government- ordered closures, such as those experienced by countless business across our state. In California, under Governor Newsom’s very broad Executive Order, thousands of California businesses were forced to temporary close down, or severely scale back their operations.
Filing a business interruption claim
On paper, Business Interruption Insurance is intended to provide coverage to reimburse companies for the profits that would have been earned, had the disaster not occurred.
Unfortunately, even though businesses have spent their hard-earned money on this type of insurance intended to cover them in the case of catastrophic events, this does not mean that insurance companies willingly pay out on these claims. In fact, business interruption claims are frequently the most difficult and hotly contested of insurance claims. We believe that businesses who have purchased these policies are entitled to compensation.
To determine if your business insurance policy covers any of the financial losses you have suffered as a result of COVID-19 and California’s stay at home order, reach out to the experienced business lawyers at Webb Law Group today.
Having a reputable attorney by your side when discussing your options with your insurance company will offer you the best possible chance of navigating the often-frustrating process. If you feel that you need legal representation, we’re happy to review your legal needs and provide consultation and support where necessary. For questions, or to schedule a consultation, contact Webb Law Group today at 559-431-4888 (Fresno) or 619-399-7700 (San Diego).