The coronavirus pandemic continues to extract substantial personal and economic tolls. As the world’s health care systems look for a vaccine, companies are turning to their commercial liability insurance policies for remedies to the economic impact. In particular, they are looking to the business interruption extensions and riders in those policies– for coverage of the revenues they have lost as a result of government shutdowns.
A Los Angeles business interruption insurance lawyer from our firm will fight for you– to make sure that commercial insurers are providing the coverage and benefits that your company is entitled to receive. This type of insurance is often tied to property and casualty losses. Most business property has remained unaffected by the coronavirus. However, insured businesses might still be eligible for business interruption reimbursements under the civil authority coverage clauses in their casualty and liability policies.
Federal, state, and local governments have forced the closure or limited employee and customer access to businesses that are deemed “non-essential.” A shuttered company that has a business interruption insurance policy with a civil authority extension can file claims for lost revenues based on this. Any Southern California business that is unsure of the scope or extent of its insurance coverage should consult with a Los Angeles business interruption insurance lawyer to determine the validity of a claim.
California declared a COVID-19 state of emergency in early March 2020. That declaration quickly led to the California shelter in place order that shut down most of the state’s businesses through April. In early May, the Governor extended the order indefinitely, with reduced restrictions on construction, landscaping services, and nurseries.
These declarations and orders form the foundation for businesses to make civil authority insurance claims for lost revenues in March, April, and May 2020, and continuing until the state lifts the shelter in place order.
Most business revenues will not immediately recover when the state lifts the current coronavirus shelter in place order. In fact, their revenues may not recover for several months or years. Civil authority coverage generally begins on the date of a shutdown order and ends when that order is terminated.
Some policies, however, include clauses or riders that extend coverage through a recovery period as well. Therefore, a business should not assume that its civil authority insurance coverage will be limited to the duration of the shutdown period. A careful review and analysis of the policy language are mandatory to verify that your business is receiving the full benefit of its civil authority business interruption insurance.
Any business that asks, “does insurance cover quarantine losses?” will cede the advantage to its insurance providers. That question focuses on the actions of a business’s clients. This gives the insurer an opportunity to object that business interruption civil authority insurance is ancillary to revenue losses– that are the result of physical loss or damage to property.
Our team at Salamati Law are anticipating these and other arguments from insurers that will deny civil authority coverage and are preparing precedent-based rebuttals. These rebuttals will support California businesses in claiming lost revenue due to the state’s shelter in place order.
To file a business interruption insurance civil authority claim, you will need to present detailed records of your regular monthly revenues before and after the California shelter in place order was imposed. Most companies that recognize more than $200,000 per month in revenues will have these records, along with invoices and receipts that can be presented to verify them.
California’s insurance commissioner has ordered commercial insurers to investigate all business interruption claims fairly and to approve or deny them within a short period of time. These policies require insured parties to provide notice of insurable losses as soon as they become aware of them. In addition, businesses should not delay making any claims under their civil authority coverage.
Please see our website or call Salamati Law directly to speak with a Southern California business interruption insurance lawyer for assistance in reviewing a civil authority policy or filing a COVID-19 business interruption insurance claim under that policy. We can also provide for legal representation in appealing an insurance company’s denial of your claim. We will fight to recover the largest insurance reimbursement for your business.