Each day, business owners in Connecticut are losing revenue as the COVID-19 virus has either halted their operations completely or they have been forced into making modifications so that their interactions with the public are limited. For instance, a florist in Southington was required to cut back to deliveries and curbside sales to help prevent the spread of coronavirus, although this has caused his sales to slow significantly, reports the Hartford Courant. As a result of the losses he has experienced, Paul Lumia said he filed a business interruption claim with his insurer to receive some sort of financial relief.
Lumia said that after speaking with his insurance agent, he was informed that his policy excludes business interruption coverage for the pandemic.
Lumia isn’t the only business owner in Connecticut who has been unsuccessful at getting their business interruption claim approved. In fact, most insurers, if not all, are denying claims associated with COVID-19 losses. The news source reported that “insurers began adding an exclusion [to policies] in 2006, a few years after the SARS outbreak, barring business interruption clauses from covering viruses and bacteria.”
Could insurers be forced to pay out for COVID-19 losses?
Although there has been some discussion surrounding lawmakers forcing insurers to pay business interruption claims associated with the COVID-19 virus, insurers say “ the scale of the coronavirus pandemic is too great to bear and business interruption insurance is intended to compensate for lost income, rent, wages, and other expenses following more limited setbacks such as fires or natural disasters.”
Peter Kochenburger, executive director of the Insurance Law Program at the University of Connecticut School of Law, says insurers are “scared” because “they never collected a premium for this kind of virus coverage.” David Sampson, chief executive officer of the American Property Casualty Insurance Association also explained that “Pandemic outbreaks are uninsured because they are fundamentally uninsurable. A pandemic by its very nature means that you can’t diversify risk, which is the fundamental basis of how insurance operates. It’s global in nature and it’s hitting everyone at the same time.”
The source says that approximately one-third of U.S. businesses have business interruption insurance and their policies may even include civil authority clauses that are supposed to cover losses “when a government agency stops a business from operating.” Unfortunately, insurers typically only approve claims when the losses stem from a fire or natural disaster, but not pandemics.
How do I know if my business insurance covers COVID-19 losses?
It depends on how your policy is worded. If you think you are entitled to business interruption coverage, yet your insurer has denied your claim, contact a Connecticut insurance claims denial lawyer for legal help. USAttorneys.com can get you connected with a local Connecticut insurance claims attorney now who is qualified to address your questions and concerns.