Pennsylvania Business Interruption Insurance Lawyer (COVID-19)
Businesses in Pennsylvania and across the country are considering whether to file business interruption insurance claims for losses due to the COVID-19 pandemic. Some insurance companies are refusing to make payments, and others are providing coverage to businesses. Accordingly, certain courts are being asked to determine whether the coronavirus losses sustained by businesses can be classified as damage caused by a disaster, meaning that business interruption insurance would apply. In Pennsylvania in particular, the status of COVID-19 interruption insurance claims remains undecided. Yet the outcome will be significant for business owners and workers alike who have suffered coronavirus losses.
Understanding Business Interruption Insurance in Wilkes Barre, PA
What is business interruption insurance, and why would it apply to COVID-19 claims? The Insurance Information Institute (III) explains that business interruption insurance is a specific kind of insurance coverage that is an option for business owners to purchase. It is also known as business income coverage (or BI coverage), and it provides compensation to businesses so that they can remain “afloat if they [are] forced to temporarily close.” Business interruption insurance generally provides coverage for the following, according to the III:
- Lost net income;
- Mortgage or commercial rent payments;
- Loan payments;
- Taxes; and
- Employee payroll.
The idea is that this type of insurance coverage allows a business to continue paying its debts and its employees, which it would have done with the earnings it made had the business been open. Generally speaking, business interruption insurance is designed to provide coverage to a business after a “major disaster” that forces the business to close temporarily, such as a fire in the building. Pandemics and communicable diseases frequently are excluded from business interruption insurance, but many companies are filing claims and arguing that the coronavirus shutdowns should be considered a disaster that qualifies for coverage.
Arguments for Business Interruption Insurance Coverage from Coronavirus Losses
Businesses seeking coverage through business interruption insurance policies tend to make one of two arguments for why they should be covered by business interruption insurance during the COVID-19 closures:
- Coronavirus actually causes damage to physical property by remaining on physical surfaces and causing infection; or
- Coronavirus resulted in loss-of-use damage.
These policies typically require “physical loss,” and pending claims in Pennsylvania will need to determine whether coronavirus or COVID-19 losses count as physical losses such that the coverage should apply. The outcome will have an enormous impact on businesses and employees alike who have lost earnings and wages as a result of the pandemic. Indeed, business interruption insurance can allow businesses to pay employees while they cannot work due to damage to the work environment.
Learn More from a Pennsylvania Workplace Injury Lawyer
If you have been unable to work because your employer followed orders to close non-essential businesses, you could be eligible for pay if your employer is able to obtain coverage through a business interruption insurance policy. Likewise, if you own a business and want to retain your employees during this unprecedented time, coverage from a business interruption insurance policy may allow you to do so. Whether you have questions about obtaining coverage as a business or a worker, you should speak with a Pennsylvania injury lawyer to learn more. Contact the Figured Law Firm for more information about how we can assist you.