While the U.S. continues to fight to overcome the pandemic that has claimed more than 40,000 lives, shut down our economy, and shuttered hundreds of small businesses, there is another battle many are having to prepare for—the battle between businesses and insurance companies. Business owners in Kansas and all other states in the U.S. are all dealing with the same issue. Their insurance companies don’t want to cover their business interruption claims stemming from COVID-19 losses.
But isn’t business interruption insurance meant to be utilized when businesses are forced to close due to an emergency, natural disaster, or catastrophe?
While insurers acknowledge that business interruption insurance does provide coverage to businesses that suffer a loss due to a fire or other natural disaster, they say they don’t cover pandemics. In fact, many insurance companies say they began adding bacteria/virus exclusions to their policies in 2006 after the SARS outbreak. The only way a policyholder is likely to get their business interruption claim approved without the help of a skilled Kansas insurance claim denial attorney is if they can prove physical loss or damages, which are typically caused by storms, fires, or other types of natural disasters.
But many business owners say that they have identified COVID-19 molecules on their premises and argue that this constitutes as physical damage, hence, their claim should be covered. While it is clear both business owners and insurers have taken a firm stance on the matter, the decision on whether COVID-19 claims should be covered will be one that will need to be made in court.
Insurers Worry that Paying COVID-19 Claims Could Result in the Industry Going Bankrupt
Although insurers allege that they are denying business interruption claims merely because they don’t cover pandemics, there seems to be a bigger issue at play that might be affecting how insurers are reacting to COVID-19 claims—they don’t want to go bankrupt. Each month, businesses are collectively losing billions of dollars, enough to wipe out the insurance industry’s surplus. Rather than lose their financial lifeline, insurers instead are saying that policyholders are “not entitled to coverage that is beyond the scope of their contracts” [Source: Reuters].
Regardless of what contracts say, insurers are likely to deny business interruption claims.
So, what do you do if you own a business in Kansas that has suffered a substantial loss due to COVID-19? You contact USAttorneys.com to help you locate and hire a Kansas insurance claims attorney to assist you with the claims process from the start. Because insurance companies are denying claims, even when a policy includes a clause that allows for coverage for viruses and epidemics, it’s best you retain a legal expert from the start as you are likely going to face an uphill battle with your insurer.