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Firm COVID-19 Bulletin: Will Business Interruption Insurance Cover COVID-19 Losses?

May 26, 2020 in  COVID-19


As businesses around the world begin the difficult task of reopening operations, a careful analysis of applicable insurance policies is necessary to determine if the financial losses incurred due to the COVID-19 pandemic are covered.  Whether or not these losses are covered may be the single most important factor in determining whether a business can survive. Herzfeld & Rubin’s Insurance Coverage Group is ready to help you to better understand your insurance policies and to enforce your rights.     

Insurance companies are taking an aggressive approach to denying coverage by issuing disclaimer letters upon receipt of claims filed by insureds, including denials based on alleged lack of “physical damage” to an insured’s property,  the “virus exclusion” and the lack of “suspension of operations.” 

A disclaimer letter, however, is not a final determination of whether coverage is available to an insured and is certainly no reason for an insured to stop pursuing coverage.  Often policies include additional forms of insurance that provide a basis for coverage, such as business losses incurred as a result of action taken by a “civil authority.” If the insurer and insured cannot reach an agreement regarding coverage, then litigation is necessary for the courts to decide whether or not a claim is covered by a policy. 

Coverage litigation is now being filed around the country challenging insurers’ attempts to deny or limit coverage. What’s more, legislation has been introduced in both New York and New Jersey that impact on whether COVID-19 related claims are covered by a policy.  In New York, a bill if enacted as proposed, will construe every business interruption policy to include COVID-19 as a covered peril and will void any virus exclusion in coverage.  Likewise, a bill introduced in New Jersey would retroactively void any virus exclusion in policy coverage.  If these bills are adopted, they will have a significant favorable impact for insureds in litigation involving COVID-19 insurance coverage. 

Herzfeld & Rubin, P.C.’s Insurance Coverage Group has decades of experience in reviewing and analyzing insurance policies and advising our clients about their rights.  We have successfully litigated disputes on behalf of our clients when insurance companies refuse to provide coverage. Whatever it takes, we are here to ensure that our clients receive the coverage that they have paid for and to which they are entitled.  Please feel free to contact us to discuss your concerns.