You should certainly consider it. If your business has a general liability commercial policy, including Business Interruption coverage, you should consider filing a claim. While most such claims are being denied because of language in most policies that requires some “physical damage” to the insured property, insurance companies are coming under increasing political pressure to cover these claims. Legislation has been introduced in several states (not Texas, yet) mandating that carriers cover COVID-19 losses for certain, usually small businesses. Moreover, in addition to Business Interruption coverage, many polices have what’s known as “Civil Authority” coverage. This typically provides coverage for losses resulting from an interruption of the insured’s business when actions by governmental authorities prohibit access to the insured’s property. Like Business Interruption coverage, there is often a requirement that there be “physical damage” to some other property, but a claim should still likely be filed. Also, some policies may include actual virus coverage, or event cancellation coverage. In short, you never know unless you examine the policies closely. The situation is fluid and it’s not clear what carriers will do in the end. And what additional political pressure may be brought to bear on them. What should you do now? Get prepared.
· Gather your policies; if you’re not sure you have current copies of them, call your agent;
· Document the losses you believe you suffered from COVID 19, so that if you decide to make a claim, you’ll be ready;
· Gather up the following, but not limit to:
- Historical and current annual financial statements;
- Federal tax returns;
- Monthly profit and loss statements;
- Monthly bank statements;
- Inventory reports;
- Payroll records;
- Invoices and purchase orders;
As we all know these are unprecedented times. You pay insurance premiums year end and year out, and while COVID-19 losses might not fit precisely within covered claim language, carriers have a duty to act in good faith, investigate claims, and act reasonably. You have a duty to do what you can to protect and preserve your business. If you would like to talk further give us a call or shoot us an email. Let us see if we can help.