Business interruption insurance offers businesses protection against financial loss when they are unable to operate.
A typical business interruption policy will include property, liability, and business income coverage. This covers losses stemming from damage to your business property or its contents caused by a covered peril, as well as personal liability claims or loss of income if the business has to close temporarily.
Most of these policies are generally used by small to mid-sized businesses.
In the past year, coronavirus pandemic has delivered a significant economic blow to many business owners and has raised questions about whether their insurance coverage includes pandemic-related losses. If your business had to close temporarily because of the pandemic, or maybe due to government-mandated shutdowns, any loss of income you experience may or may not be covered by your policy. That may depend on the policy, the courts, and even the state legislature.
In situations where business interruption policies have ambiguous language, judicial intervention may be necessary to determine if pandemic losses will be covered. Quite a few court cases have been filed recently in connection with business interruption coverage and the coronavirus pandemic, but the rulings have been a mixed. Some legal decisions are going in favor of business owners and others are siding with insurance companies.
Be sure to review your policy with your insurance agent.
Compliments of Rand Insurance – a member of the EACCNY.