Due to the COVID-19 pandemic, the cash flow of your business has diminished or all but disappeared.  You do not know if your business will survive the pandemic and resume normal operations.  In an effort to replace the revenue your business has lost, you filed a claim for business interruption losses with your business’ insurance company.  Within a very short period of time, the insurance company denies your business’ claim on the basis that the Coronavirus did not cause physical damage or loss to your business premises and/or because of a virus coverage exclusion in your insurance policy.  You are left wondering how could the insurance company have made a decision so quickly and how is that decision fair?

If your business interruption claim is denied, what should be your next step?

The simple answer is to have your business interruption insurance policy (BI Policy) reviewed by an attorney who is experienced with, and knowledgeable about, interpreting such insurance policies because there could be reasons why the denial of coverage is an erroneous decision.

What is an example of a reason why coverage should be provided?

The language in just about every BI Policy which triggers the provision or denial of coverage is, “physical damage to or physical loss of” the business premises.  In other words, a covered peril must cause physical damage to or loss of the business premises.  Insurance companies, almost uniformly and in a “knee-jerk” fashion are denying BI claims on the basis that COVID-19 did not cause any physical damage to the business premises, while they uniformly disregard the fact that COVID-19 and the governmentally-imposed stay-at home orders have made the business premises inaccessible, thereby causing a loss of use of the business premises which, arguably, satisfies the definition of “physical loss”.

Can the Virus Exclusion in my BI Policy be overcome?

It is distinctly possible but only in the hands of a lawyer who understands the nuances of BI Policy interpretation and the burden of proof issues that will exist during any litigation over the BI Policy terms.

What should I do if my BI Policy claim has been denied and I want to challenge the denial?

You should retain an attorney to file a Declaratory Judgment action with the court for the purpose of having a judge determine whether or not insurance coverage should be afforded by your insurance company.

What are my business’ chances for success with a litigated BI Claim?

Chances for success in litigation are dependent in large part on an analysis of the terms of your particular BI Policy.  While there are common features and terms in most BI policies, each policy is written somewhat differently, which is why a careful, thoughtful analysis of the terms of each policy is indispensable to an outcome analysis.

Who should I contact?

Bob Nemeroff, Esq. of Friedman Schuman, P.C., has many years of experience with insurance contract interpretation litigation.  He is currently accepting a limited number of business insurance litigation claims on a contingent fee basis depending upon an initial review of the BI Policy terms and an analysis of your business’ chances for success in court.  Bob can be reached at 215-690-3827 or

Please do not be discouraged by the denial of coverage from your business interruption insurance company.  Your insurance company’s decision is not the last authoritative word on the subject.  You have legal recourse.

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