Far too many business owners are operating without proper insurance or woefully underinsured. That was never more evident than in the early onset of COVID-19. Once local and state governments began ordering businesses closed, many entrepreneurs had no recourse and many were forced to close. While some business owners are still trying to hang on, others are faring much better because of their insurance policies. While it hasn’t always been easy for policyholders to cash in, it’s certain that business owners who lacked property insurance policies were left out to dry.
In the event of a loss, business interruption insurance provides coverage for income a business would have earned had it been operating normally. It can also help pay for expenses like employee wages, taxes, rent, loan payments and relocation expenses. Business owners across the country have submitted insurance claims for lost revenue, typically under “business income” provisions of their property insurance policies. Business interruption insurance, however, is usually triggered by a direct physical loss or property damage. For this reason, some insurers have argued that COVID-19, a virus, should not be covered as a loss. The precise wording of your policy is key and the right agent can help make sure you’re covered in such events.
COVID-19 is an airborne virus and as such, some have argued that it can contaminate physical objects like HVAC systems, which would naturally force a business to close. In such cases, business interruption insurance may lend assistance. The issue has been hotly contested and the courts have been weighing in. Several restaurants in North Carolina won a case against their insurer, arguing that a virus does indeed cause physical loss or damage. The court ruled that the restaurants’ loss of use of their property, which was in fact triggered by a shutdown order, did constitute physical loss. Other businesses have won in cases when insurers have sought to deny claims and in each case there is one commonality: the businesses were insured for loss.
COVID-19 is a challenge for businesses and insurers, alike. This is, in many ways, unprecedented territory and there is a great deal to figure out. Business owners need to be insured for losses and it will take a great agent to help you parse what is and is not covered in your policy. Contact an Insure Black agent today and discuss what the options are for your business. At some point the pandemic will be over but risk in business will never subside.