After the SARS outbreak in 2002 and 2003, many insurance companies excluded virus-related losses in their “business interruption” coverage plans for small businesses.
Now, insurance companies are trying to avoid covering losses from businesses during the coronavirus pandemic — even when the losses are indirect effects of the virus, due to school closures or government “stay at home” orders.
In response, a growing number of lawsuits have been filed by unhappy business owners against insurance companies.
Last month, famed chef Thomas Keller of The French Laundry filed a lawsuit against his insurer, Hartford Fire Insurance Company, for denying coverage for their business interruption insurance policies.
Interestingly, many of these lawsuits are claiming they suffered a “direct physical loss” to property due to COVID-19 viral contamination in buildings and surfaces, rendering property unusable.
Insurance companies have been hit with lawsuits from a wide range of clients, including the native Chickasaw and Choctaw nations, movie theaters, sports bars, dive shops, and multiple restaurants.
Many business owners are unhappy to see their claims denied, especially after paying hefty premiums to insurance companies for years.
Lawmakers in at least 3 states are trying to help small businesses by proposing legislation that would force insurance companies to pay billions of dollars for business losses due to government shutdowns, according to the Wall Street Journal.
Source: Blog: Ongoing COVID-19 Related Insurance Coverage Litigation – What You Need to Know