The global COVID-19 pandemic has had devastating impacts on small businesses country-wide. While certain industries have been able to persist, others have seen an almost complete stop in the market, causing more than 22 million people to have been laid off or furloughed. Many business owners fear that their company will not see the other side of the pandemic and that the shutdown has brought an untimely end to life as they know it. If your business has been affected by the impacts of the coronavirus pandemic, you may have eligibility to file a claim for business interruption.
Types of Claims You Can File for Coronavirus Business Impacts
As a business owner, you must always have plans in place for disasters or potentially significant business interruptions. Still, even with those protections, it was nigh impossible to foresee just how deeply COVID-19 would impact our lives, especially concerning the economic shutdown. Yet, not all hope is lost. Even if you were one of the countless business owners who did not receive any assistance from the Small Business Administration, you can still find help in other avenues:
Business Interruption Coverage
Review your insurance policy. Many businesses are insured by companies that will financially assist them if ever the company was forced to close for a certain period and consequentially lost revenue. Normally, this would come into effect under “Direct Physical Loss of or Damage to Covered Property,” however, this clause is open to interpretation and current circumstances may not match the necessary criteria.
Read your policy closely, as it will give clear definitions as to what would be covered by this policy and what would not be. You’ll want to search specifically for “Virus or Bacteria Exclusion,” as this exempts insurers from financial support in the event of an outbreak. This was introduced back in the early 2000s after the SARS pandemic. If your policy has such an exclusion, you are not out of options.
CARES Act Assistance
This stimulus bill also created Pandemic Unemployment Assistance (PUA) to support both employers and workers at this time. Though your employees may be without work, your unemployment tax rate will not increase, since the money funding them is supplied by the CARES Act. Additionally, half of the funds you supplied your staff during unemployment will be reimbursed to reimbursable employers, along with government and non-profit employers.
First-Party Property Policies
These policies typically cover loss of profits along with property damage. Coverage may apply to various types of business interruption due to the policyholder’s individual business-related circumstances (if property damage occurred), or interruptions due to suppliers and/or government mandates. These are all regarded as business interruption, contingent business interruption, and order of civil authority, respectively.
The virus will better fall under Non-Structural Property Damage, however, following the decision of Gregory Packing, Inc. v. Travelers Property Cas. Co. of America in 2014. If your facility has been exposed to individuals carrying the virus, you may be eligible for support.
Review your current insurance policies and see if you have protections similar to any of those discussed here. There are many ways to file a claim for assistance during this time. Though the world is bleak, you are not out of hope.
