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Arnett & Arnett June 2, 2020

You probably have business insurance if you own or rent your business property.

A Business policy covers you for a number of risks including fire, storm, and water damage and usually includes loss of business income that results from covered losses. If you had to close or severely limit your business activity because of the Covid-19 pandemic, you should consider making a claim for your losses.

Your losses are likely covered under your commercial policy.

Insurance companies are busy trying to convince businesses that there is no coverage for pandemic lockdown-related losses in their commercial policies. In fact, many, though not all, commercial policies do provide coverage. The following examples demonstrate a few ways in which lockdown losses may be covered:

  • An insurance company may argue that the policy requires a “physical loss or damage” to the premises, and that being shut down is not structural damage to the insured property. However, many courts have held that “physical loss or damage” occurs when a hazardous condition renders the insured property unsafe or unusable for its intended purpose.

  • Many policies have endorsements that cover closures by civil authority.

  • Some policies have endorsements which specifically provide coverage when ingress or egress to the property are restricted.

  • Some policies have specific virus and/or pollution exclusions that an insurance company might use to deny coverage, but these are often limited and not applicable to a pandemic.

If you think you might have coverage, make a claim right away.

Make your claim in writing as soon as you can.

  • Your policy may have time requirements to make a claim so don’t delay.

  • Make the claim directly to the insurance company and not to the sales agent you bought the policy from. Some agents are reportedly being trained to dissuade people from even making a claim. By the time the insured figures out that a claim could have been made, it might be too late.

  • Your written claim can be as simple as an emailed to the insurance company telling them you are making a claim.

  • Feel free to download a form letter from us to help you make your claim. Click Here. It’s free and we won’t even need your email. We just want people who are entitled to coverage to not miss their opportunity.

If they ask for more information, give it to them.

Your policy will have a cooperation clause that will require your to reasonably cooperate with additional information. So if they ask for more information about circumstances of your shutdown or your financial statements, great. Give them what they ask for.

Don’t get discouraged if your claim is denied.

If your insurance company denies your claim, don’t panic. Most insurance companies are currently denying all their Covid-19-related claims. But the good news is that you have preserved your claim.

By making your claim you keep your options open.

Once you get a written denial from your company you can take it to an attorney to review your options.

We can review your policy and denial letter.

Once you have been denied coverage, Arnett & Arnett will be happy to review your policy together with the insurance company’s response and let you know what you can do next.

Our consultations are free, and contingent fee agreements are available.

Download a sample to help you make your claim today.

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