There is more money available to many businesses than just PPP or EIDL loans. Many businesses are entitled to payment from their insurance companies to compensate for losses related to COVID-19.
Most businesses carry some form of business disruption insurance as part of their overall comprehensive insurance or property/casualty policy. These policies may include contingent business interruption coverage to compensate for loss of commerce due to action by civil authority, supply chain interruptions, or the closure of a nearby business that drive customers. What coverage any insurance provides is governed entirely by the language of the policy itself.
Your specific policy provisions will govern what coverage you have. Some policies provide coverage for the loss of business income due to the actions of civil authorities. Such coverage would greatly benefit businesses ordered to close or reduce operations in response to COVID-19.
Other business interruption coverages compensate for losses due to interruption and extra expense caused by disruptions in supply chains. Under such policies, lost sales volume may be compensable.
Additionally, employers need to carefully read their worker’s compensation policies to see if communicable diseases are a covered illness. Any employer whose employees allege they contracted the virus on the job may want to assist their employees in filing for worker’s compensation benefits.
Regardless of coverage, now is a wise time to review insurance policies. If your business is suffering as a result of COVID-19, we recommend you contact your insurer to request premium accommodations or to reinstate lapsed insurance. We also recommend that businesses contact their insurers early about renewing insurance in order to reduce the risk of non-renewal or a lapse in coverage.
It is important to act promptly. Some insurance industry professionals expect that renewals may be delayed as underwriting guidelines evolve. Even more importantly, some insurance policies contain provisions forfeiting coverage if an insured fails to timely tender a claim.
An insurance policy is much more than the summary of benefits. To determine whether coverage exists, it is necessary to review the language of the policy itself. If you believe you may have suffered a covered loss, we recommend that you consult with a qualified insurance professional or attorney to review your policy and potentially assist you to make a claim. During times of high claim volume, insurance companies are slow to process claims and any insured who presents a well-documented, well-crafted explanation of the loss and the damages that resulted will find its claim moving more quickly through the process.