Austin Business Interruption Claims

CALL (800) 863-5312 TO SPEAK WITH BUSINESS INTERRUPTION INSURANCE ATTORNEYS FOR FREE

Due to the COVID-19 pandemic, many businesses are unable to operate, or in some cases, are being forced to shut down.  Business owners may have purchased business interruption insurance for exactly this kind of event, and may be able to file a claim to receive compensation for their expenses and loss of revenue. 

Unfortunately, some insurers may attempt to deny these claims by asserting that the COVID-19 pandemic is excluded from their policy, even if pandemics are not specifically excluded in the policy language.  Many insurers are claiming their policies only cover “physical” loss or damages, and that the losses incurred due to COVID-19 do not fit these parameters.  Some policies may cover losses caused by actions taken by civil government, however, such as stay-at-home orders requiring some businesses to cease operation.

If your business has been impacted by COVID-19 and related challenges, such as forced or recommended closures, lost profits, or other damages, or if your claim for business interruption insurance for COVID-19 losses has been denied, call (800) 863-5312 to speak with an Austin business interruption insurance attorney at Zinda Law Group. 

WHAT IS BUSINESS INTERRUPTION INSURANCE?

Business interruption insurance (BII) is meant to help a business during an event in which the business is unable to operate due to a disaster or other major event that prevents the normal operation of the business.  Business interruption coverage may protect against losses from fire, flooding, natural disasters, vandalism, earthquakes, and equipment failure.  However, BII coverage varies with each policy, and will depend on the exact wording of the policy and any exclusions that are present.  BII coverage generally cannot be taken out as a stand-alone policy, but rather must be included as part of a comprehensive business insurance policy.  BII coverage can usually be triggered by damage to the business, damage to customers, damage to suppliers, or government action.

BII coverage can provide compensation for:

  • Loss of profits
  • Employee payroll
  • Utility expenses
  • Taxes
  • Temporary locations or relocations
  • Loan repayment
  • Operational Costs
  • Retooling/Training Costs

Compensation for business interruption is usually based on the previous month’s revenues, and takes numerous factors into consideration, such as net income, continuing expenses, and extra expenses that may have been caused by the disruption.  It is important to keep detailed financial records to provide documentation of your business’ revenues and expenses.

FILING A CLAIM FOR BUSINESS INTERRUPTION COVERAGE

If your business is unable to operate due to a disaster and you have business interruption insurance, you may be able to file a claim for compensation.

1. Notify Your Insurer

The first thing you should do is contact your insurer to inform them of the COVID-19 impact on your business so you may begin filing your claim.  It is important that you act quickly, so as to ensure you meet deadlines associated with filing this type of claim.  You should examine your policy carefully to determine if the interruption is covered and what your responsibilities as the business owner during such a disruption are.  If the disruption was caused by a malicious act by a third party, you should also immediately contact and file a report with local law enforcement.

2. Mitigate Damages

You should take steps to mitigate damage and make any necessary temporary repairs to prevent ongoing damage.  If the damage will require you to shut down your business, you should do so immediately.

3. Maintain Detailed Documentation

It is important to document all available details and evidence of the interruption.  This includes documenting and photographing any damage.  Keep any damaged items that were required to be replaced during any emergency repairs that were needed.  Detailed documentation of the finances of your business before and after the disaster may often be key to determining the compensation you may be entitled to.  This includes earnings and expense reports, payroll details, bills, and other financial records pertaining to the operation of your business. 

4. Next Steps if Your Insurer Denies Your Claim 

You pay your premiums and expect your BII insurance to be there for you if you are forced to close your business due to disaster.  However, insurers may attempt to deny your claim by insisting that the cause of your losses is not covered by their policy.  If your insurer denies your claim, you should consult an Austin business interruption insurance attorney to help you seek compensation and file a BII denial lawsuit.  In order to file a BII denial lawsuit, you should ensure you have documentation proving you are a licensed business owner who has paid premiums on time, filed your claim within required time limits, and the insurer has denied your claim.  A BII lawyer may help you go over your policy and determine if your losses may be covered.

DO I NEED A LAWYER TO FILE A BUSINESS INTERRUPTION CLAIM?

If your business has been forced to close, and you need to file a BII claim, you should consult an attorney experienced in handling business interruption claims.  An attorney may help you review your policy to determine what is and is not covered, as well as help ensure you have the appropriate documentation you may need to submit along with your claim.  Insurers will often seek to avoid paying claims, and may deny your claim, even though it may be covered by your policy.  A BII attorney can help you file a BII denial lawsuit to seek compensation.  A BII lawyer will have experience going up against insurers and can help you navigate the complex and murky language used in your policy to build a strong case for your appeal.  Insurers have teams of lawyers whose only job is to minimize or eliminate any compensation paid out by the insurer.  Hiring an attorney may help you to level the playing field and to let the insurer know you are serious about pursuing compensation.

Learn More: Why Hiring a Lawyer Will Help Your Case

HOW ZINDA LAW GROUP HANDLES FIRST PARTY INSURANCE DISPUTES

Disputes between an individual and their insurer are known as first party insurance disputes.  Insurance companies have a contract with their policyholders and must act in good faith.  First party disputes claim the insurer has breached the contract or acted in bad faith.  In a breach of contract claim, it is argued that the business owner and insurer had a contract, providing that if the business owner paid a certain premium regularly, the insurer would provide compensation for certain losses in the event of an interruption to their business.

By denying the business owner’s valid claims and failing to live up to their end of the bargain, they may be in breach of contract.  The business owner will need to prove they have fulfilled their premium obligations and that their claim is valid.  In a bad faith claim, it is argued that the insurer has acted in bad faith by denying your claim, often by alleging that the damages are not covered under your policy.  Your Austin business interruption insurance attorney may argue the insurer never intended to provide compensation, but rather intended to use loopholes dependent on legal semantics in the wording of the policy to avoid any payout.

In order to build a strong case to support your BII claim, you will need to provide documentation and evidence.  This includes detailed documentation of your expenditures, revenues, and other costs during the interruption as well as before.  You should also carefully document all communication with the insurer throughout the claims process.

Learn More: How to Negotiate with an Insurance Company 

ZINDA LAW GROUP’S AUSTIN ATTORNEYS MAY HELP YOU AND YOUR BUSINESS

If your business has been unable to operate due to disruptions in supply or government shelter-in-place orders, you may be able to file a business interruption insurance claim for COVID-19 losses, including to seek compensation for your loss of profits and ongoing expenses. Your eligibility may depend on the exact wording of your policy.  Many insurers, however, are denying COVID-19 related claims on the basis that they are not covered, even if your policy does not specifically exclude pandemic related damages.

The Austin business interruption insurance lawyers at Zinda Law Group may be able to help you analyze your policy and seek compensation for your damages.  If you are filing a BII claim or your claim has been denied, contact the attorneys at the Zinda Law Group for a free consultation.  You don’t owe us anything unless we achieve a favorable outcome.  That’s our No Win, No Fee Guarantee.

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