Will my business owner’s policy cover my loss of business income and operating expenses related to COVID-19

If you are the owner of a business, large or small, which maintains a Business Owner’s Insurance Policy, which provides coverage for the loss of business income and operating expenses, you are probably wondering whether your business will be able to successfully make a claim for such losses. The answer lies, in large part, in terms of your insurance policy and how those terms may be interpreted by the insurance company relative to the Coronavirus pandemic.

Generally, the loss of business income and operating expenses are compensable by the insurance company where the loss was caused by physical damage or physical loss directly to the business premises. The legal issue will be whether the pandemic directly caused physical damage or loss to the premises. The insurance industry is likely to contest these claims on the basis that the pandemic did not directly cause physical damage or loss. There are, however, a number of effective counter-arguments available to business owners which may prove successful.

Currently, the insurance industry is in a state of flux, but is likely to deny such claims, resulting in substantial litigation in the future. This could change, however, if the federal government intercedes and provides funding to the insurance industry to cover such claims regardless of the technical policy requirements. We can assist you in reviewing the merits of and making your claim. If your claim is denied, we can be of help in pursuing a declaratory judgment action against the insurance company.

Please contact Bob Nemeroff, Esq. at 215-690-3827 or at rnemeroff@fsalaw.com.