COVID-19 and Business Interruption Insurance in Maryland

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Has your Maryland business lost income or incurred additional expenses during the COVID-19 pandemic? With the help of a Maryland business interruption insurance attorney, a claim under the business’s insurance policy may be filed. Don’t wait, there may be time limits on when you can file a loss for business interruption in Maryland.

The attorneys at Rice, Murtha & Psoras represent business throughout Maryland and the United States that have been negatively affected by COVID-19 and orders by Governors (“Civil Authority”) that their business must shut down.

If your State executive branch has ordered your business to close during the COVID-19 outbreak or you have lost income because of the COVID-19 pandemic, we can help.

Contact Rice, Murtha & Psoras at 410-288-2900 if you want to file a claim or if your claim has been denied for lost income during the coronavirus pandemic shutdown.

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FAQ for Maryland Business Interruption Insurance Claims + Lawsuits

We are keeping a list below of the most common questions we’re hearing from our clients and business owners. Bookmark this page as we will continue to update this page with questions and answers for business owners in Maryland.

How does business insurance work in Maryland?

Business insurance is commercial coverage for losses a business may suffer during the period of coverage. While businesses are not required to carry insurance, most will buy a policy to protect their interests and profits.

The basics of a business insurance policy are:

  1. Business contacts an insurance broker;
  2. insurance broker shops around for the cheapest insurance policy for business;
  3. Broker presents policy to the business owner;
  4. The business owner selects a policy;
  5. The business owner pays premiums every year;
  6. If a business has a loss (fire, theft, terrorist attack, data breath, closing by civil authority, etc) the business files a claim under the policy;
  7. The insurance company pays the business for losses.

Step 7 is where the insurance companies are not holding up their end of the bargain during the COVID-19 pandemic. If you’ve been denied coverage for losses during COVID-19, contact our office by email or phone at 410-288-2900.

Will Business Insurance cover income losses during COVID-19?

Yes, business interruption insurance will cover lost income and expenses incurred during the COVID-19 pandemic if the insurance carrier accepts the claim and agrees to pay. However, most insurance companies to this point are denying insurance coverage.

Why are insurance companies denying insurance coverage?

insurance companies are drying insurance coverage because they don’t want to pay for business losses during COVID-19. The insurance companies and their spokesperson will argue that if they pay for all business losses then they will go out of business.

However, the insurance companies (Allstate, State Farm, Liberty Mutual, Geico) make billions of dollars every year. in addition, the insurance companies have billions of dollars in reserves to pay for the types of losses.

Some of the most common reasons for denial of business insurance coverage during COVID-19 are:

  1. There has been no damage to the property;
  2. Virus exclusion;
  3. The business was not closed completely, meaning the business was able to offer limited services, such as carry-out;
  4. The business owner was not prohibited from entering their premises.

What if my policy has an “Exclusion of Loss Due to Virus or Bacteria” clause?

Many commercial business policies in Maryland include an exclusion due to viruses or bacteria. This exclusion usually claims the insurance company will not cover loss or damage caused by or resulting from any virus, bacterium, or other microorganism that induces of is capable of inducing physical distress, illness, or disease.

This provision or exclusion could be read to prevent businesses from pursuing claims based on COVID-19, but it remains undetermined if this will end the chances for the business to prevail. You should speak with a Maryland personal injury lawyer if you have a virus exclusion attached to your policy.

Which Insurance Policies Do No Have Virus Exclusions?

From our research, the following insurance companies offered commercial business policies that did not contain virus exclusions:

If you have a business loss from COVID-19 and your business insurance policy was sold by one of these insurers, contact our office for a free policy review to determine if you can be reimbursed for income losses.

I have paid business insurance premiums for years, why am I not covered for lost income during COVID-19?

You should be covered for business income losses, you have paid premiums to cover this type of loss and you are entitled to pursue a claim for lost income during the coronavirus in 2020. However, insurance companies are not paying for the reasons mentioned above.

Time limits to file claims for business interruption insurance coverage

Some insurance policies have time limits that restrict policyholders. If a business does not file a claim within a prescribed period of time after the loss, then the business may be barred from collecting or using the insurance coverage.

Do I have to put my insurance company on notice?

Yes, under most policies you must notify your insurance company there has been or is a loss. There are time restrictions on what will be covered and what will not be covered.

Why do insurance companies require you to give notice?

Insurance companies are all about numbers and predicting the future. They want to know what pe of exposure they have so they can keep reserves for claims.

Why do insurance companies care about reserves?

The insurance companies make most of their money by lending premiums collected from their policyholders. For example, if they collect $1,000.00 for a year and they know they will pay out $400 for claims that year, then they will invest the $600 and make money from the interest earned.

The insurer knows they will pay out $400 in claims by analyzing data. But, if there is some shift or change in the risk landscape, such as policyholders making claims for lost income due to COVID-19, then they must increase that reserve, but they need the data to do.

If they don’t know you plan on making a claim then they cannot protect their money. Thus, they require policyholders to notify them of potential claims. If you don’t notify the insurance company, then they can deny your claim and not pay your business for the loss based on lack of notice or not filing in a timely manner.

What if my Maryland business insurance denies my claim for COVID-19 losses?

If your business insurance carrier denies your claim, then you should contact an attorney to file a lawsuit on your business’s behalf.

How long will a claim/lawsuit for COVID-19 business interruption insurance take?

There are a number of outcomes after a business files a business interruption claim in Maryland. The most common scenarios are:

  1. A claim is filed, the insurance carrier sends an immediate denial of coverage. This is the most common situation and appears that the insurance companies are not investigating the claim at all;
  2. A claim is filed, the insurance company denies the claim, insured then files a lawsuit. The lawsuit alleges that the insurance company has breached the contract. The courts then consider if there was s contract, was the contract reached (broken) and what are the damages (lost income and expenses)
  3. A claim is filed and the insurance company pays the business. Least likely to occur and no reports exist that any insurance company has paid a claim in Maryland.

Is there a class-action lawsuit for coronavirus business interruption insurance?

At this time (4/29/20), there are no class action lawsuits filed in Maryland for business interruption insurance as a result of COVID-19 (coronavirus.

What is the Maryland insurance Administration advisory on Business interruption insurance?

The Maryland insurance administration has taken a position in favor of the insurance companies but left the door open for business owners to pursue a claim on their own. They are assuring businesses that they are watching the industry but have not said whether they would force insurance carriers to cover business losses due to COVID-19.

Restaurants – Carryout & Delivery – Can I still make a claim for lost income?

Yes, most insurance policies describe losses based on income, not on whether you were open or closed. Thus, if your restaurant stayed open sold limited meals, then you may have a claim for lost income under your commercial business policy.

Bars & Nightclubs – Can I file a claim for lost income?

If you own a bar or nightclub, you have the right to file a claim for lost income. Since orders in Maryland forced you to close your doors, you are eligible to pursue business insurance coverage. If you have a bar or nightclub business insurance policy, forward that information to our lawyer for review.

Barber Shops – We are here to help with your business insurance claims and lawsuit

If you own a barbershop or hair salon, you know how difficult the Governor’s orders have been. You have been forced to close and have lost thousands of dollars by not be able to cut men’s and women’s hair during COVID-19 shutdown. If you purchased a business insurance policy for your barbershop or hair salon, we can file a claim and seek lost income.

My Maryland small business was forced to close due to COVID-19, can I file a claim?

Yes, if your small business was ordered to close by the government, then you may have a claim under the civil authority provision of your business insurance policy, That may be hard to determine since most insurance policies are between 122-180 pages long. No one, except lawyers, read these policies. We have read thousands of pages of these business policies and we know what to look for to help ou clients.

Contact our office today if you own a small business that lost money due to the pandemic closing.

What happens if I hire your law firm to file a commercial business claim for COVID-19 losses?

If you want to hire an insurance coverage attorney to handle your COVID-19 income loss claim, here are the current steps we are taking:

  1. Contact Rice, Murtha & Psoras by email or phone (410-288-2900).
  2. Send your business insurance policy by email to us;
  3. We will review business policy;
  4. If we can pursue a claim, we will send a DocuSign retainer agreement, once completed we immediately file a claim with the insurance carrier. (We want the denial letter as soon as possible so we can move forward with file a complaint).
  5. If your business policy includes coverage for income loss, the business interruption claim attorney will file a claim with the appropriate division of the insurance carrier;
  6. Wait until the insurance carrier responds to claim.
  7. If the insurance company denies the claim, then file a lawsuit in the appropriate court to see a ruling by a judge.

How much does it cost to hire a lawyer for a COVID-19 business interruption insurance claim?

All law firms are different, but most lawyers handling COVID-19 business interruption insurance claims are taking the cases on a contingency basis. This means the business owner or business will not have to pay any money out of their pocket to hire the lawyer or law firm to pursue the claim.

The lawyer will pay all of the expenses out of their own pocket, which may include (investigations, business records, tax information, court costs, expert witnesses, arbitration fees, copies, etc.) The business will not pay a legal fee unless there is a settlement or verdict. Since most insurance companies are denying all claims, it is expected that a lawsuit will have to be filed to force the insurance company to pay the business for their losses.

COVID-19 Business Lawyers Here to Help

If you are ready to get your business back up and running, speak with our business lawyers today. Contact Rice, Murtha & Psoras at 410-288-2900 to talk about your options and how we can help.


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