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COVID-19 Business Interruption Claims Denial Lawsuit Investigation

PRACTICE AREAS: Consumer Protection
CASE STATUS: Under Investigation

Attention: Business owners who had their insurance claims denied for business interruption due to the COVID-19 outbreak.

Berger Montague is investigating whether insurance companies are wrongfully denying business interruption claims for loss of business related to the COVID-19 outbreak. We are interested in speaking to business owners to help determine whether a lawsuit can be filed.

If you are a business owner whose coronavirus-related business interruption claim was denied, please fill out the form on this page. You may be able to recuperate your losses. More information about our ability to review and pursue claims for business interruption against the insurance industry related to lost revenues arising from the pandemic is available in our Business Interruption Claims brochure.

What are the allegations?

Berger Montague is conducting an investigation into whether insurance companies wrongfully denied insurance claims filed by business owners whose operations were disrupted by the COVID-19 global pandemic.

What is business interruption coverage?

Business interruption coverage typically reimburses a business for a variety of monetary losses. This includes lost revenue, lost profit, closure or reopening costs, and even the costs of litigation. Covered events could include cancelled events, supply chain disruption, and blocked access to the premises due to civil authority orders, such as the stay-at-home orders many states have put in place.

It is important to note that while business interruption coverage in general may often apply for a time period of up to one year, some included coverage may be for a more limited time. Your full insurance policy should identity the coverage limits.

How could my business interruption claim be denied?

There are four common reasons for coverage denial:

  1. Failure to report loss promptly: Many policies require the business to promptly report a claim, even if the full losses can’t be measured yet. If the coronavirus shutdown or reduction of your business is ongoing and you are still tabulating the lost revenues and profits, you should not delay assessing or filing your claim for business interruption coverage under your policy. Berger Montague can help you quickly file a claim to preserve your rights under the policy.
  2. Exclusions for microbes, viruses, and/or pandemics: Denials may occur because the policy excludes coverage for viruses or pandemic events. COVID-19 is the first pandemic to impact businesses. Since the SARS epidemic of 2002 – 2003, many business interruption insurance policies have excluded coverage for bacteria, microbes, or viruses. However, many of those exclusions may not be enforceable during our current pandemic.
  3. Lack of “physical damages” to the business premises: Insurers may also deny a claim due to a lack of “physical damage” to your business’s premises. This may be one of the most contested provisions in the coming months and years. Courts will be called upon to answer whether a business’s premises can be damaged by a virus when the business owner, an employee, or a customer is diagnosed with COVID-19 and has been in contact with the premises. Because this virus spreads through the air, courts will also have to consider whether confirmed cases in a business’s city or municipality might also qualify as “physical damage.”
  4. Lack of a mandatory stay-at-home order: While much of the country is under stay-at-home orders, some states are not, and other orders are voluntary. Even if there is a mandatory stay-at-home order in your state, your business may qualify for an “essential services” exception. Most business interruption policies place a responsibility on the business owner to mitigate any damages that occur, and an insurer may use these provisions to try and deny claims for coverage under the provisions of the insurance policy.

How can Berger Montague help?

The first step is to determine if your business has business interruption coverage. A review of your full policy, including all endorsements, is necessary to determine whether you have this coverage.

The next step is to figure out what events are covered by the policy. Typically, this is referred to as a “covered peril” or “covered cause of loss.” Most policies will specify the events covered or excluded. In fact, many of the property insurance policies sold in the United States are all risk policies covering property damage or loss except what is specifically excluded. Therefore, a review of your entire policy is required to determine what coverage exists for your business.

Do I have to pay to consult with an attorney?

We are happy to review your insurance policy free of charge. If we decide to represent you in a lawsuit, we will enter into a written contingent fee agreement with you. A contingent fee agreement means we only get paid if we win, and we will receive our fees from the amount paid by the defendant in the case.

About Berger Montague

Berger Montague is a full-spectrum class action and complex civil litigation firm. We have been recognized by courts throughout the country for our ability and experience in handling major complex litigation.

Lead Attorneys

Shanon Carson Headshot

Shanon J. Carson

Managing Shareholder
E. Michelle Drake Headshot

E. Michelle Drake

Michael Dell'Angelo Headshot

Michael Dell'Angelo

Managing Shareholder
Daniel Walker Headshot

Daniel Walker

John Albanese Headshot

John Albanese

Abigail J. Gertner Headshot

Abigail J. Gertner

Y. Michael Twersky Headshot

Y. Michael Twersky


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