Over the last few weeks, the United States, along with the rest of the world, has suffered tremendously as a result of the outbreak of the coronavirus (COVID 19). To cope with the exponential spread of the virus, many cities, counties and states have put in place “stay at home” orders, requiring citizens to stay home whenever possible and only leave their homes for essential needs. The outbreak of COVID 19 has had an equally serious impact on businesses, forcing those that are deemed “non-essential” to close or reduce their hours of operation and causing a severe disruption to the economy.
In California, Governor Gavin Newsom implemented the nation’s first statewide shelter-in-place order. This has put California at the forefront of the fallout from these orders. Consequently, businesses in California began to suffer sooner than businesses in other states and continue to do so at a higher and higher rate as the pandemic continues to spread and bring parts of the economy to a virtual halt. Due to the closure of the businesses in Los Angeles and the rest of California, caused by COVID-19, these looming uninsured losses could cut the growth of the economy in half before 2021.
However, many businesses have property and casualty insurance policies otherwise known as commercial property (or “first-party”) insurance policies in place (also often referred to as casualty insurance). Depending on the policy and the coverages that the business has purchased, such businesses may be entitled to recoup some or all losses incurred as a result of the COVID-19 closures.
How Our Attorneys Can Help Your Business Recuperate Losses Due To COVID-19 / Coronavirus
Certain policies may have better loss coverage than others, but the extent of coverage is rarely a black and white issue. Although most commercial policies contain “civil authority” or “civil order” coverage, which encompasses losses that indirectly result from municipal and statewide orders, such as California’s shelter-in-place order, many insurance companies will claim to interpret the policy in a way that attempts to exclude coverages of losses due to pandemics or will use other “interpretations” of the policy in order to get out from under paying out. If your business carries business interruption insurance (which typically covers loss of income and rental value), your chances of recovering your losses may be increased, depending on the criteria that need to be met for the coverage to activate.
The California Department of Insurance points out:
In general, business interruption insurance policies require a direct physical loss or damage to a property caused by a covered peril (i.e. fire, water damage, etc.) in order for business interruption coverage to apply. Most commercial policies have exclusions for loss due to contamination by virus and similar perils, such as pandemics.
However, there are exceptions to the exclusions listed above. Having a well–versed and knowledgeable attorney represent your business can increase the chances of recovery and amount of recovery through your insurance policy. Here at Citywide Law Group, our expertise includes reviewing, understanding and dissecting insurance policies to ensure maximum recovery for our clients. We offer to review your claim for free and will not charge a fee unless we are able to recover some or all of your losses.
The California Department of Insurance is currently attempting to come to an agreement with the insurance industry to find a solution for business suffering from pandemic-induced loses, however their process will be long and time–consuming, and may never reach fruition. At Citywide Law Group, we are taking a more proactive approach to making sure our clients get the compensation they need and deserve so that their businesses are able to survive during the shelter-in-place order. Our approach to each case is tailored to the business and based on the insurance policy that governs it.
What To Do When Insurance Companies Reject Your Claim?
Insurance companies are claiming that “[b]usiness interruption policies do not, and were not, designed to provide coverage against communicable diseases such as COVID-19,” however, the attorneys at Citywide Law Group believe that this is exactly what business interruption insurance is intended to do and exactly why our clients purchased the coverage.
The insurance companies are taking a hardline approach to deny coverage for business interruptions caused by COVID-19 due to the billions of dollars they would otherwise be forced to pay out. Citywide Law Group is here to hold the insurance companies’ feet to the fire and ensure that they pay for your business’ losses and do so promptly.
Contact us now for a free consultation and review of your insurance policy. (424) 248-2700.