COVID-19, or coronavirus, has swept through the United States and caused a plethora of problems for business owners across the United States. Many business owners are struggling with adapting their company to a purely online service, while others have been forced to close their companies indefinitely. As a result, many people are left without sustainable income. To combat this, business owners have begun making business interruption claims with their insurers. If your insurance company denied your business interruption claim, contact an experienced Maryland COVID-19 business interruption claim attorney.
The Law Offices of Randolph Rice recognize the many burdens faced by business owners during the coronavirus pandemic, and we are here for you. Our legal team possesses extensive experience litigating a variety of business claims, and we would be proud to represent you. To schedule a free legal consultation to discuss your claim, contact the Law Offices of Randolph Rice at (410) 694-7291. You may also contact the firm online.
How Business Interruption Insurance Works in Maryland
With nearly 400,000 cases of COVID-19 in the United States at the time of this article, business owners across Maryland have been forced to close in order to avoid further spread of the virus. This has been devastating for business owners that are unable to conduct their business online or companies that thrive on human-to-human contact. To prevent their company from going out of business, many business owners have elected to use their business interruption insurance.
Insurance companies offer business interruption insurance in order to reimburse lost income that was incurred due to a “covered peril.” A covered peril can include a number of circumstances. For example, if a restaurant sustained a considerable amount of damage due to a fire, the insurance company for the restaurant may view this as a covered peril. Other examples of covered perils include:
It is important to note that business interruption claims are typically linked to a loss of income or the severe damage to an insured property. Insurance companies usually offer business interruption insurance as a portion of a broader business insurance policy. The coverage limits of the business interruption insurance will depend on the level of coverage selected by the policyholder.
Additionally, insurance companies only provide business income reimbursement for a limited amount of time referred to as the “period of restoration.” The period of restoration starts at the date the peril occurred and will last for a reasonable amount of time. Specifically, many insurance companies have a restoration period of one year, which should provide enough time for a business to resume operations.
To learn more about why insurance companies are denying business interruption claims, you should continue reading and speak with an experienced Maryland coronavirus business interruption attorney.
Pursuing Litigation After a Business Interruption Insurance Denial
Business interruption insurance is vital for companies that have been substantially impacted by the COVID-19 pandemic. Reimbursement for business income loss can not only help keep a business from bankruptcy, but it can also provide for a number of other items:
- Wages for employees to avoid layoffs
- Leasing payments
- Taxes owed by the business
After paying into an insurance policy for coverage for business interruption, a company should not be denied the compensation they need to survive. Unfortunately, many insurance companies are turning to obscure provisions to prevent their obligation to pay businesses during the government shutdown. Specifically, insurance companies are claiming business owners are not entitled to business interruption payments because a pandemic is ordinarily not considered a covered peril.
As mentioned, covered perils typically cause some form of tangible loss for a business. For example, if a business had to relocate because a fire damaged the property they rented, then an insurance company would consider this a covered peril. Due to this loophole, many business owners are wondering what they can do to secure compensation for their business.
Before pursuing litigation against the insurance company, one possible option is to refile the claim as a business interruption claim based on civil authority. Specifically, a company can allege that a mandated government shutdown should be considered a covered peril as business owners cannot reopen until the mandate is lifted.
Note, however, many insurance companies still require a physical loss in order to reimburse a business owner for a loss of income. This means a business owner may still have to support a civil authority claim by showing evidence of a physical loss.
Another option available to business owners is suing their insurance company for the compensation needed to operate their company. Our firm understands the threats posed to business owners by the coronavirus, and we are here to help you weigh your legal options.
It is also important to note that legislators are considering a number of options that will make insurance companies pay out to business owners. However, you should not assume that this may happen in time to save your business from going insolvent. Let the Law Offices of Randolph Rice manage your insurance claim to fight for the compensation you deserve.
Our Maryland COVID-19 Business Interruption Claim Attorneys Can Help
If your business was not approved for business interruption payments, you should contact an experienced Maryland coronavirus business interruption lawyer. At the Law Offices of Randolph Rice, we are committed to working with business owners that are experiencing a number of difficulties due to the COVID-19 pandemic.