With the COVID-19 pandemic forcing the partial or total shutdown of countless businesses throughout the U.S.—particularly restaurants, cafes, and bars—many food and beverage establishment owners are turning to their insurance policies as a possible lifeline during this unprecedented time. Unfortunately, those same business owners are being told that their business interruption insurance does not cover coronavirus-related shutdowns.
If you are a business owner concerned about how the novel coronavirus pandemic will affect your business and your livelihood, you may have options. It is still unclear if business interruption insurance will apply to partial and total business shutdowns caused by COVID-19. In most cases, the answer will depend on the exact language of your policy, as well as the specific circumstances of your unique situation. We encourage you to reach out to an experienced attorney for help understanding your policy and your rights regarding business disruption coverage.
If you are interested in learning more about filing a business disruption claim in New Orleans due to the coronavirus pandemic, contact our attorneys at The Chopin Law Firm LLC for a free consultation.
Understanding Your Business Interruption Policy
Simply put, business interruption insurance is meant to cover damages when a business loses income as a result of an unanticipated disaster or event. For example, if a restaurant is destroyed during a hurricane, the restaurant owner may be able to turn to his or her business disruption policy to claim damages due to income lost.
While every policy is slightly different, business interruption insurance typically covers:
- Business income
- Operating expenses
- Temporary relocation
- Loan payments
Some business interruption policies will also cover losses in the event that government actions cause the temporary cessation of business operations, resulting in a loss of income and other damages.
Why Are Insurance Providers Disputing Restaurants’ Business Interruption Claims?
In the wake of a state order to immediately cease any gatherings of more than 250 people and a follow-up order from New Orleans Mayor LaToya Cantrell to limit all restaurant services to delivery only, The Oceana Grill, located in the French Quarter, filed a lawsuit seeking a declaratory judgment regarding whether the restaurant’s business disruption insurance will cover its damages if the establishment is forced to close. The matter is already being disputed—and similar disputes are cropping up in states across the nation.
The primary reason that some insurance providers may be refusing to pay these claims rests on the fact that many policies have exclusion clauses specifically stating that they are not responsible for losses caused by viruses and bacteria. In many cases, these clauses were put into place following past pandemics and large-scale health concerns, including those involving H1N1, SARS, and Zika. Again, understanding the exact language of your policy is incredibly important in understanding your options.
Should You Still File a Claim?
The forced partial and full closures of businesses in New Orleans and throughout Louisiana and the United States has put a serious strain on small business owners. At The Chopin Law Firm LLC, we understand the stress you are currently under; our New Orleans business interruption claims lawyers can help you understand your options and provide you with the dedicated legal representation you need.
These are uncertain and unprecedented times, but our firm is here to help small business owners and individuals within our community in understanding and acting on their legal rights. Filing a business disruption claim could allow you to recover for your losses or it could simply create a record of the damages you have suffered in the event that, in the future, these claims are honored.