COVID-19 Business Interruption Claims

Does Business Interruption Insurance Cover Losses Caused by COVID-19?

Loss of business claims resulting from the pandemic are being ignored, delayed and denied. Insurance companies have tried this before after other catastrophes such as tornadoes, hurricanes, and environmental disasters that resulted in bankruptcies for the small business owner. Chute, O’Malley, Knobloch & Turcy, LLC can help you learn how to best handle your business loss cases against the insurance industry.

On March 20, 2020, Governor Pritzker announced the executive order in response to COVID-19 (COVID-19 Executive Order No. 8). In that executive order, Governor Pritzker required that all non-essential business operations shall cease until April 7, 2020. On April 1, 2020, Governor Pritzker executed COVID-19 Executive Order No. 16 and extended the date from April 7, 2020 to April 30, 2020.

Impact on Businesses in Illinois

Because of the characteristics of COVID-19 and requirement for social distancing to stop its spread, it had an immediate and dramatic impact on business. Although restaurants and bars suffered immediate losses and dominated the news coverage, other businesses also suffered losses. Hair salons and nail salons closed because professionals could not be within 6 feet of their customers and they were not declared an essential business. Barbershops, both local and national chains that we all recognize, have closed temporarily. Movie theaters and other theaters have all closed because the audience cannot comply with social distancing mandates. Exercise gyms also closed for similar reasons. Many health clubs are refunding monthly dues to members during the closure. Airlines, hotels, motels and car rental companies — and many other businesses associated with travel and airports — have all suffered business interruption losses associated with the COVID-19 pandemic. All businesses dependent on travel and foot traffic at the airports are suffering financial losses. Many doctors’ offices have closed and all elective surgeries and treatments postponed. Dental offices and chiropractors have also been prevented from seeing and treating patients for many conditions that are not acute and may be safely postponed.

Business Interruption Insurance

Many insurance companies sell commercial property insurance policies. Those policies provide insurance coverage that indemnifies the insured business from losses resulting from necessary suspension of business operations caused by a government order. Many of these policies are considered an “all risk” policy that provides a broad range of insurance coverage for losses (unless the policy explicitly excludes a particular cause). Some policies specifically exclude losses from viruses or bacteria while others do not. The insurance may cover losses such as an actual loss of business income. Interruption may include a complete closure or even partial slowdown. Some policies also include coverage for extra expenses incurred to minimize the suspension of business, in addition to the cost to repair or replace the damaged property. Some business interruption insurance policies cover losses suffered when there is an action of civil authority that prohibits access to the business. This commonly occurs when a city engages in road construction and prevents customers from getting physical access to the business. The coverage applies when a governmental action is taken in response to dangerous physical conditions.

Notice Requirements

Time is of the essence. Business interruption claims may be lost forever if a business owner delays giving notice to its insurance company. Formal notice of claim is required pursuant to the specific terms of the insurance policy.

Chute, O’Malley, Knobloch & Turcy, LLC is Uniquely Prepared to Represent Small Businesses

The insurance companies have teams of insurance experts and lawyers who are preparing to fight businesses and use every strategy to deny claims and avoid payments. No business should combat the insurance company alone. Business owners have enough work just to avoid total failure of the recovery. Every business owner needs a partner to fight for all the money their business deserves.

Chute, O’Malley, Knobloch & Turcy, LLCis uniquely prepared to fight for businesses impacted by COVID-19. We have over 30 years of litigation experience, with a long history of fighting the insurance companies, representing small businesses, and handling claims for lost profits.

To schedule a free consultation with our attorneys, complete our contact form or call (773) 906-4063.