COVID-19 is not only a potential threat to our own lives, but also to many small and large businesses around the world. Luckily, business insurance policies are designed to help you and your business stay intact under certain circumstances. From providing compensation to your workers to keeping the lights on when there’s reduced or no income, business insurance is paid for during the good times so that it may provide help during the bad. However, knowing what your insurance company will pay out is not always clear. Understanding the wording of your policy can help you better determine what your insurance company will help with, as well as when you may need to take legal action if you feel your policy is not being honored.
Business owners with commercial business insurance may have a claim for losses related to the COVID-19 pandemic if their insurance declarations page includes the following coverage types:
- Business Interruption
- Business Disruption
- Contingent Business Interruption
- Civil Authority
- Government Ordered Closure
- Lost or Restricted Access
- Loss of Ingress/Egress
- Open Perils
- Special Perils
Review the following potential impacts of the pandemic and how insurance coverage can help recover losses.
This section of a business insurance policy is usually referred to when there is physical damage to your business that prevents it from operating. Insurance companies often pay out for this type of coverage during events like natural disasters, fires, or any other circumstances that can make a business potentially hazardous. With pretty much every business being considered “unsafe” to physically be in, policyholders may have a reasonable claim to enact this coverage option if it is part of their insurance package. While every agency may have a different definition of what is considered a business interruption, it is worth looking into if your business has closed due to the pandemic. If you are told no, you may have a case depending on the wording of your policy and should seek assistance from legal professionals.
Supply Chain Disruption
Even if your business is able to remain open, you may still be impacted if you aren’t able to stock your regular inventory. With many suppliers shutting down, this trickles down to the retailers who sell their goods. The loss of revenue from products that would otherwise be sold can be considered a business loss covered by your insurance policy.
If you own an event-based business, the forced cancellations of large gatherings will have a dramatic effect on your operations. While you may be liable to refund your clients, these business losses can often be covered by your business insurance policy.
Many businesses are getting creative in an effort to remain open even if their physical location is not. With social distancing guidelines, working remotely is a strategy that is working for many. However, this transition can introduce new costs. Depending on your business, you may need to provide new technology for you and your employees to remain efficient. This can include new computers, internet access, and other resources to remain in communication. All of these “emergency” expenses can potentially be covered under your business insurance policy.
We understand that these are difficult times, but they can be made better by taking full advantage of your business insurance policy. Smith Shanklin Sosa is proud to represent business owners in South Louisiana to help ensure they are getting the services that they need from their insurance providers. We have decades of experience in interpreting liability and commercial insurance policies. Don’t rely solely on an insurance representative, agent or adjuster to determine whether you have coverage. Contact us today for a free consultation and we can help review your policy with you.