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Does interruption insurance cover pandemics?

On Behalf of | Jul 23, 2020 | Denied Insurance Claims

American businesses have faced substantial hardship in 2020. As the pandemic continues to ravage the nation’s economy, many owners are wondering if they’ll survive. While the Paycheck Protection Program (PPP) offers some assistance, it’s not always enough.

Many businesses rely on interruption insurance coverage in times like these. Unfortunately, countless providers deny pandemic-related claims. Not only does this leave owners uncertain about the future, but their workers as well.

The denials have resulted in countless federal lawsuits. Business owners are claiming their providers breached their contractual duties and acted in bad faith.

Understanding interruption insurance

Interruption insurance is supposed to cover lost revenue when businesses can’t operate. Whether interruptions stem from supply chain issues or property damage, this coverage can help owners keep the lights on.

In some instances, if a business property becomes contaminated with the coronavirus, which causes it to shut down, owners can argue that the virus caused a direct physical loss. That’s because a virus can transfer from surface to surface. When it does, it that can cause physical harm to others.

Insurers claim the costs are too expensive

Sadly, many providers are rejecting any claims related to the coronavirus, stating that pandemics are “uninsurable.” They claim that’s because they don’t cause the same harm as fires and gas leaks. Some even state most businesses don’t fit their coverage criteria since government-imposed closures didn’t target specific entities.

There is no “one size fits all” approach to interruption claims

If business owners want coronavirus interruption coverage, the facts and circumstances of their case can play a significant role in their approval. But if providers continually deny their claims, a trusted legal partner can advocate for their needs.