Businesses that purchased business interruption insurance are now shocked to learn that they are not covered during the pandemic.
Business owners purchase many different types of insurance to protect their business in a number of situations. Fire insurance protects a business in the event that there is a fire, while liability insurance protects the owner from paying damages if someone becomes injured on their property. Business interruption insurance is another type of coverage business owners buy to help recover their losses in case their business cannot operate. Now, months after the stay-at-home orders began, so many business owners are filing lawsuits against certain insurers that those cases may be compiled into a class action lawsuit.
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Reason Insurers are Denying Claims
The insurance industry has argued that business interruption insurance does not protect businesses from stay-at-home orders. Instead, this coverage is meant to protect businesses in the event of a flood, hurricane, or other unforeseen circumstance that causes damage to the business. Insiders in the insurance industry have stated that business interruption insurance policies specifically exclude pandemics, and any economic downturn they cause.
According to the American Property and Casualty Insurance Association, business owners that had to shut down during the pandemic incurred losses between $393 billion and $668 billion every month. The Association has stated that paying out on the thousands of business protection claims that have been filed across the country would place the solvency of the insurance company in jeopardy. Still, business owners claim that because government orders prevented customers from entering their property, the coverage should apply.
Consideration of Business Interruption Insurance Claims
Due to the high volume of business interruption lawsuits that have been filed across the country, a federal judicial panel is deciding on how to handle them all. The U.S. Judicial Panel on Multidistrict Litigation (JPML) is currently deciding on how to proceed with over 450 federal complaints related to business interruption insurance.
The JPML will consider whether the cases can be consolidated into one class action lawsuit, as well as if the civil actions in multiple federal judicial districts can be transferred into one federal district court. The consideration comes after one group in Florida has asked the JPML to consolidate the cases, and many others around the country have made similar requests.
A Possible Solution
For business owners who have been denied business interruption coverage, there is a potential solution. U.S. Rep. Mike Thompson, has proposed HR 7412 into Congress. If approved, this Business Interruption Relief Act of 2020 will reimburse insurance companies that voluntarily pay business interruption claims due to the pandemic.
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Have a Claim? Our Florida Business Interruption Claims Attorneys Can Help
If your business had to shut down due to the pandemic and you experienced great economic losses as a result, our Boca Raton business interruption claims attorneys at Ged Lawyers, LLP, are here to help. We will assist you with the claims process, ensure your claim is filed properly, and give you the best chance of recovering the compensation you need. Call us today at (844) 443-3529 or contact us online to schedule a free case review.