Can Business Interruption Insurance Protect Your Business During COVID-19?

March 25, 2020

This article is for educational and entertainment purposes only. This is not legal advice and should not be relied on as such. Every case is different. Consult a licensed professional in your state. Viewing this website or its content does not create an attorney-client relationship with Lyda Law Firm or any of its lawyers.

Some commercial property insurance providers may cover business interruption expenses. Insurance coverage that includes this policy may vary depending on the provider. Locate your policy to determine its coverage, as it is likely that your landlord already requires commercial property insurance. 

Finding Coverage in Commercial Property Insurance Policies

Business interruption insurance coverage will be located somewhere in your policy. It covers damages sustained during business interruptions but may only be limited to physical damage to your property, such as a fire or flood, that prevents you from operating.

Look for specific language that grants coverage in a situation like COVID-19 interruptions. It is not uncommon for a policy to state that you are covered when a regulatory authority orders you to close due to the outbreak of a notifiable disease, or something of the sort. For example, Colorado businesses such as restaurants, bars, or theaters that have been ordered to close may be covered in that sense. However, it is uncertain how much insurance companies will fight these claims. 

Business interruption insurance claims may affect your eligibility for the Economic Injury Disaster Loan program related to the Coronavirus. If you are applying for an emergency loan from the SBA, you can only qualify for the amount of injury you have sustained because of Coronavirus, minus the policy limit of business interruption insurance coverage.

Your insurance premium will likely be affected through a claim, though it may be preferable over an SBA loan because unlike an SBA loan, you would not have to pay back the insurance claim coverage.

How Lyda Law Firm Can Help

Lyda Law Firm is still serving clients in Seattle and Denver during COVID-19. We are digitally open to answer any questions you have about how this affects your business.



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