Lawsuits filed as insurance companies deny ‘Business Interruption’ claims
Local attorneys said they are seeing more business owners looking for help from their insurance companies in wake of the pandemic.
The problem is, insurance companies refuse to pay.
This is a big issue involving billions of dollars and thousands of lawsuits across the country.
Agricultural and Food Law Attorney at Wallace, Jordan, Ratliff & Brandt, LLC, Jason Klinowski, said business owners really need to read the fine print.
Analysts report more than a thousand businesses have filed lawsuits against insurance companies that refuse to pay “Business Interruption” claims over COVID-19.
“Every little business, every small business owner whether you’re in Alabama or wherever you are, you’re kind of up against a major insurance company that has interests that go well beyond your small business in making sure they don’t have to write the check,” Klinowski explained.
Interruption coverage protects businesses against shutdowns they can’t control.
But many business owners are now discovering that when their sales and services are interrupted by say, a virus, they’re not covered. Many insurance companies have been denying coverage because covid-19 did not cause “direct physical damage” to property, which is often the key to business interruption insurance.
“And with the COVID-19, if there’s any success with the litigation, one is it could be payout to these small businesses who definitely need the money, but I think ultimately, no matter what, win, lose or draw, it will result in more modifications and amendments to business policies to kind of guard against the types of arguments they’re confronting in court,” Klinowski said.
Klinowski said many businesses he’s been working with have had to make major adjustments to cope with not getting the insurance money.
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