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Loss of Business Due to Coronavirus

As East Texas businesses and companies navigate the COVID-19 pandemic, they should take stock of existing insurance policies that may provide coverage for:

  • Damages and losses suffered by the company, or
  • Potential liability of the company.

What Types of Claims Could Arise?

Because of this unprecedented pandemic and the government’s response, your business may encounter several issues which could make you eligible to file a claim under one or more types of insurance policies. Examples of these issues and the types of insurance that may provide coverage are:

  • Problem: Slowdown or halt of business and revenue
    • Coverage: Property insurance with business interruption (BI) or “civil authority” coverage (review your coverage carefully, as many policies will require actual physical damage to property before BI coverage is available)
    • Coverage: Supply chain risk or trade disruption insurance
  • Problem: Contamination to business property
    • Coverage: Pollution or environmental insurance
    • Coverage: Commercial general liability insurance with pollution/environmental coverage

Policy language varies widely, so there are no universal answers about whether a COVID-19 related issue will be covered. Some policies will have exclusions for contamination, pandemics, bacteria or viruses, or the exercise of “civil authority.”

Policies must be read as a whole. It can be difficult to decipher when a coverage or exclusion applies. DO NOT rush to judgment about whether a claim is covered or an exclusion applies. Likewise, insurance employees and agents should not be relied upon to provide you with an unbiased perspective on these issues. The attorneys at Biggs & Greenslade PC can provide a FREE initial assessment of your policy to help determine if you have a viable claim.

What Can I Do Now to Prepare for Potential Claims?

Keep detailed records of everything that affects your business and the steps that you take. Maintaining a timeline of events will be very helpful when the time comes to file a claim. For example:

  • Document when employees or customers report symptoms or a positive coronavirus test.
    • Note especially the extent to which employees or customers were on the premises while potentially contagious.
  • Document any additional cleaning or preventative measures you take.
  • Track payroll and all other expenses related to COVID-19.
  • Document the dates and reasons for any changes to your operations, including, policy changes, hours of operation changes, or closures (whether voluntary or government-mandated).
    • Make copies of any government orders mandating your closure.
  • Keep any pre-outbreak business plans or forecasts and carefully track actual performance.

What Should I Do If I Believe I Have a Claim?

  • Do not delay. Notify your insurer and broker as soon as possible of a claim or potential claim. Do not give a recorded statement.
  • Contact Biggs and Greenslade, P.C. to help navigate you through the process.

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