All across the country, non-essential businesses have been ordered to close their doors to the public. This has devastated millions of business owners, many of them unsure of whether their business will survive the pandemic or not. Restaurants have been hit particularly hard, as consumers are hesitant to venture out into crowded, enclosed spaces even after shelter-in-place restrictions are lifted.
Of course, all of this should make your restaurant eligible for coverage through business interruption insurance. However, many insurance companies are claiming that there is too much gray area and are subsequently denying claims. If you are a restaurant owner, contacting a knowledgeable and experienced restaurant business interruption insurance lawyer at Salamati Law in California can provide you with several important ways to get around the gray area and determine whether you qualify for coverage during these challenging times
Widespread Denial of Business Interruption Coverage
As restaurant owners everywhere seek support from the very policies for which they pay several thousand dollars annually, insurance companies are doing their best to find loopholes to deny such assistance. Many business owners, upon reviewing their policies as of late, have discovered that within the text hides a variation of a “viral pandemic exclusion” or “virus exclusion” clause. Such clauses deny coverage for shutdowns and business interruptions related to the emergence and subsequent spread of any viruses, bacteria, and other microorganisms that negatively impact the physical conditions of staff and employers.
Thousands of insurers are now facing lawsuits as restaurant owners point out that it was not the virus that has shut down their businesses, but government mandates, which are typically covered by business interruption policies. To determine your eligibility for coverage under a business interruption policy, you must establish whether there have been losses that have triggered the policy. For this, you must pay very close attention to the language of your policy.
Determination of Eligibility
For instance, most policies state that “all risks of direct physical loss of or damage to” commercial property will be covered. Still, it is unclear whether government shutdown mandates due to COVID-19 constitute a “direct physical loss.” To make matters more complex, legal authorities have found that the use of “or” in the policy language changes the eligibility criteria. The slight change of language may mean that the inability to use the property in question qualifies a restaurant for coverage.
If you are unsure of your qualification for this policy, your circumstances may fall under “contingent business interruption.” This covers interruptions in business operations due to complications with third party suppliers. So, if your supplier(s) have been forced to shut down due to the ongoing pandemic, you may find coverage under this policy, as you cannot proceed in normal business operations without standard business supplies.
Though this all seems extremely complicated, do not be discouraged, and certainly do not deny yourself a claim. Even if the language is not clear to you, you must pursue coverage as even companies with supposedly airtight policies have been found legally obligated to provide coverage where they believed they were exempt.
To assist you in navigating your eligibility for business interruption insurance, contact a lawyer today. They will guide you through the language of your policy to gain a better understanding of eligibility criteria. If your claim is wrongly denied, they will assist you in filing a lawsuit against your insurer for breaching the agreed-upon contract. You don’t have to face this alone. Get the help you need today by contacting an experienced lawyer to stand by your side.
