Covid 19 Business Insurance Law Miami Broward Florida. Florida Gov. Ron DeSantis issued a stay-at-home order to counter the spread of COVID-19 in our communities. With closures beginning last month throughout the state for many businesses, owners and operators are facing more than employee layoffs — they are fighting for their livelihoods.
The loss of business and the sheer uncertainty of both the novel coronavirus (COVID-19) and the 30-day timeline have raised more questions than answers. Unfortunately, not all businesses will be able to survive. However, those businesses with “business interruption” coverage in their insurance policies may offer them an avenue to recoup some of their lost revenues during this down time.
Understanding business interruption and how the policy clause relates to COVID-19 is difficult. Commercial property insurance that includes business interruption coverage is designed to compensate owners for lost revenues from forced or unforeseen closure. Although some of these policies include clauses to cover losses when a government agency stops a business from operating, this insurance typically covers weather-related incidents that can be held directly responsible for physical loss to property, such as hurricanes, earthquakes, wildfires and windstorms.
But as fear and the reality of losing income mounts from shutdowns and recommendations for social-distancing continues, business owners with interruption clauses in their commercial property insurance policies want to know if a virus can cause physical damage.
The impacts of the coronavirus are far-reaching. Concern about lost revenue, liability for the health and welfare of workers, their family members, and customers remain top-of-mind for all businesses. As a result, many businesses have started to question whether they might have insurance coverage available to respond to this unprecedented situation. Although the analysis of any particular claim for insurance benefits will vary based on the specific language of insurance policies and the circumstances of each case, below is a summary of common insurance considerations in light of the coronavirus pandemic.
Many commercial property insurance policies provide coverage for financial losses due to business interruption suffered as a result of “direct physical loss or damage” to covered property – often the business’s physical facility. If coverage is afforded, insurance may be available to cover lost net income and operating expenses while operations were suspended.
Whether a property has suffered “direct physical loss or damage” is a potential area of dispute that may vary by state law. Some courts have found that this requirement may be met if insured property is rendered useless or is substantially impaired as a result of certain contaminants. These cases are fact-specific and, in this environment, insurers are routinely taking the position that there is no coverage for business interruption losses attributable to COVID-19 because the virus has not caused “direct physical loss or damage” to property. Secondarily, many insurers are denying claims based on various common policy exclusions, including exclusions for “loss due to virus or bacteria.” These denials have already led to a handful of lawsuits around the country, and it is likely different rules will continue to emerge. To arrange a consultation, please contact us by email or call 305-374-7974. We represent clients with insurance disputes throughout the State of Florida.