North Carolina Department of Insurance Says it Can’t Force Business Insurers to Cover COVID-19 Claims

The North Carolina Insurance Commissioner recently wrote a letter to business owners in the state addressing a major concern that has many turning to their insurance claims denial lawyers for help. That concern stems from insurance companies denying business interruption claims filed for COVID-19 losses. After insurance carriers started denying claims filed by desperate business owners seeking financial relief, Insurance Commissioner Mike Causey was compelled to speak out on the issue.

While Causey’s letter starts off with a sympathetic tone, he quickly made his point—the Department of Insurance “can’t legally force insurers to cover a risk which they didn’t intend to cover.” Causey says that “standard business interruption policies are not designed to provide coverage for viruses, diseases, or pandemic-related losses because of the magnitude of the potential loss.” The commissioner also explained that “mandating coverage for this size and type of loss while canceling existing exclusions in the policies would end the very existence of the business interruption insurance market as we know it.”

Paying Out Business Interruption Claims Could “Cause Companies to Fail”

In his letter, Causey says that recent estimates have shown that businesses with 100 or fewer employees have suffered losses between $220 billion to $383 billion per month. Essentially, what this means is that the COVID-19-related losses for businesses of all sizes would likely amount to far more than what the industry has in total reserve funds, which is a little over $800 billion. Causey says that if insurers had to pay business interruption claims, “this type of loss could cripple the insurance industry causing many companies to fail, which would put the protection of homes, automobiles, and businesses at risk.”

So, what happens to the business owners who have been relying on their insurance companies for protection from instances like the COVID-19 pandemic?

While the North Carolina Department of Insurance says that it is “more than happy to work with legislators on both the state and federal level as well as the insurance industry to navigate this unprecedented peril,” it isn’t prepared to force insurance companies to cover COVID-19-related claims. Therefore, if your business interruption claim was denied but believe you are entitled to coverage, you’re going to need an experienced North Carolina insurance claims denial lawyer representing you.

Business owners in North Carolina will not only face an uphill battle against their insurer if they choose to challenge the denial on their own, but they likely won’t obtain a favorable outcome. The fact is, the majority of insurance companies have taken the same stance, and that is, to not cover COVID-19 claims. So, if you want to increase your chances of getting your business interruption claim approved, let USAttorneys.com connect you with a North Carolina insurance claims denial attorney who is eager to help you.