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What Is a COVID-19 Business Interruption Claim?
Businesses from coast to coast have hit stalls because of the COVID-19 pandemic. With the economy still reeling, companies have shuttered and businesses have gone belly up. Cash-strapped small businesses straddle a thin line between staying afloat and bankruptcy. The Paycheck Protection Program sought to offer a buffer from bankruptcy, but those funds cover primarily administrative overhead—and have proved difficult to secure. A COVID-19 business interruption claim may offer you a chance for further financial reprieve.
Picking Up the Slack
As the COVID-19 pandemic upended life as Americans knew it, the federal government earmarked funds specifically for keeping small businesses afloat. The Paycheck Protection Program issued forgivable loans to small businesses to cover their routine costs, including payroll, mortgage interest, utilities, and rent. Sharp declines in sales, or general revenue loss, rested outside the Paycheck Protection Program’s scope.
Fortunately, other routes to financial relief may be attainable. Where the Paycheck Protection Program lacks—a business interruption claim can come into play.
Business Interruption Claim: The Basics
Some commercial property insurance and business owner’s insurance policies adopt business interruption coverage. This coverage primarily applies to business closings due to disasters or disaster-related damage. However, depending on the language of the policy, this coverage could extend to COVID-19.
A major benefit to business interruption claims lie in their financial flexibility: these claims can address a wide range of business expenses. Like the Paycheck Protection Program, business interruption claims provide for payroll and other fixed costs. However, business interruption claims stretch further. These claims also reimburse losses in profits and revenue, personnel retraining expenses, change in residence costs, and equipment upgrades.
If insurance legalese fails to exclude pandemic from its list of covered loss causes, a claim may be in order. Additionally, a claim could be cited based on specific clauses—and the language therein. An “outside sources” or “Civil Authority” clause may open a route for recovery because of the government’s statewide shutdown of businesses and services.
Making Your Claim
A couple hurdles stand between your business and the business interruption claim it deserves to be awarded. First, a thorough business and employment record, with accompanying revenue and expense reports, needs to be developed to solidify your case. Second, you’ll have to prove that your business closing during COVID-19 compromised your business’ ability to function—and that the cause for closing falls under your policy’s purview.
How Wettermark Keith Can Help
Even if your insurance policy seems straightforward, a claim could be tricky to secure. Your insurance company may try to dodge responsibility by posturing COVID-19 as a once-in-a-lifetime anomaly. Compounding this, oftentimes rulings favor insurance companies, rather than hardworking businesses and individuals. Wettermark Keith has decades’ long experience in handling insurance companies; we can help your business interruption claim bend toward compensation. Contact us for a free consultation.