Insurance is designed to protect us from the unforeseen. Your premium payment is an investment to ensure that your business and your finances withstand any unforeseen circumstances. It also serves as peace of mind through difficult times that may occur throughout your life.
But what happens if the very insurance company which has been taking your premiums for years denies your claim when you need it most? You will need the trusted attorneys at Sullivan Papain Block McGrath Coffinas & Cannavo, P.C. to assist you.
As the novel coronavirus remains a real threat to the physical and financial health of New York residents, many business interruption claims are unfortunately being denied. If you or a loved one are a business owner whose livelihood has been affected by the COVID-19 outbreak, please contact us today. We are here to help you through these unprecedented times, assisting you with any business interruption claims or related issues you may be struggling with.
Business interruption claim denials can be incredibly disappointing during these tough times. We are here to make sure you get the representation you need to challenge a denial of your claim.
In NYC, most business interruption claims are being denied due to the fact that there is no “direct physical loss” associated with the interruption. Many business interruption policies have specific language that states that only those properties which suffer physical damage of some sort may qualify for compensation via a business interruption claim.
Additionally, many policies also explicitly exclude threats associated with viruses, infections, and pandemic. These provisions were added after the SARS outbreak in the early 2000s – unbeknown to many who signed up for such insurance policies.
Despite specific provisions detailing the coverage limitations, we believe you may nonetheless be entitled to compensation from a business interruption claim. These are truly unprecedented circumstances – and as such, the current limitations may not necessarily apply to your situation. For example, although there is a provision to exclude viral threats and/or pandemics, the scale of the COVID-19 pandemic facilitated a mandatory governmental response that nobody could have prepared for. As a result, one could argue that these circumstances are not necessarily excluded by existing provisions in business interruption policies.
Additionally, governments at both the state and local level here in New York and elsewhere are currently discussing the possibility of legislation that may be able to provide relief to business owners.
As the economy suffers and more people are left to abandon their business ventures, any pending legislation to assist business owners may be a matter of “when”, not “if.”
Business interruption insurance would normally reimburse a business owner for lost revenue and income, any payroll that they owe to employees, and any continuing expenses that persist even through interruption, such as mortgage and utilities.
Under the current conditions, your business may qualify for a business interruption claim if:
While we expect to see a dramatic impact on bars, restaurants, and other businesses in the hospitality and retail services industry, we also anticipate that many other professional services that were shut down may also file a claim. This includes dentists, plastic surgeons, gyms, and other useful services to our economy.
First and foremost, we will need to know if you had business interruption insurance coverage in your policy. For a full consultation, we require a copy of your entire insurance policy. Often, the definitions of terms are found in sections other than the business interruption portion of the contract. Additionally, some providers do not offer a separate contract for business interruption insurance – it is often incorporated into a business owner’s comprehensive policy.
It is crucial for us to be able to evaluate whether there is coverage and what, if any, limitations there are on that coverage. Once we have had an opportunity to look at whether the insurance company should be providing the coverage, we will need to evaluate your losses due to the unexpected shutdown.
In order to fully appraise your losses, we also recommend that you provide us with copies of any earnings reports, expenses, and other financial records. If this is difficult or impossible to find, we can also look at your earnings history and extrapolate your losses based on that information.
Due to these uncertain times, every client’s coverage and needs will vary upon a number of unique factors and circumstances.
The amount that you can recover may depend on your policy. Some policies set limits on the amount one can recover for business interruption. Others have no such limit. Some provisions within business interruption coverage, such as payroll, are often determined by how much you pay into it, and the length of time you choose to cover payroll for your employees. Thus, the attorneys will need to assess your total damages sustained and compare it to the limits available in your respective policy.
Many cases will also likely require the use of forensic accountants and other experts who can quantify your business loss. Hiring experts and exhausting all opportunities for compensation often can be the difference between a significant recovery and none at all.
One might think that it is best to wait until you know the full extent of your loss before filing a claim. While that may make sense intuitively, it may not be the correct legal move to make.
Many policies permit you to claim ongoing damages as a result of the business interruption. This could be very important for a business owner as you need money now to survive. With our help, depending on the policy language, it could be possible to set up an income stream as your damages are incurred, that is we could submit proof of an ongoing loss.
Yes. If you have paid premiums for years to protect against this business interruption, then a PPP loan should have no bearing on whether you receive a check from your insurance company for this loss.
If you have been denied coverage for your business interruption claim, please call Sullivan Papain Block McGrath Coffinas & Cannavo, P.C. to discuss your case. These extraordinary circumstances are difficult for nearly everyone – let us help you get the support and assistance you need to move forward.