Business interruption insurance can create many obstacles, including a claim process that can be more difficult than most other types of insurance. This is especially concerning for business owners in 2020, as the coronavirus pandemic caused regular operations to be ceased for months.

Providers are always reluctant to pay out business interruption claims

Even after Hurricane Irma struck many parts of Florida in 2017, business owners learned some difficult lessons about how many insurance providers will go to great lengths to avoid paying interruption claims. Only about 0.3% of all claims made after Irma were made as interruption claims, rather than property damage claims. This may be due to a combination of interruption insurance being more rare, or knowledge that these kinds of claims are less likely to be successful. 

There is usually an exclusion built into these policies that prevents policy holders from getting paid during any kind of mandatory government shutdown. Some of the policies limit payments after evacuation orders to those based on physical damage, which would be useful after a fire for example. This usually requires a local fire or police department to order the structure to be unsafe and unfit for use until repaired. There have also been situations where chemical leaks that forced evacuations were covered as well. Time deductibles are another frustrating aspect of these policies, which bar claims that are made if a business is closed for less than three days in many cases. 

An interview with a professional from the Florida Association of Insurance Agents revealed that many business owners may not even have interruption insurance, even if they think they do. It is important to read the fine print of the policy or talk with an agent to find out if your policy contains this kind of protection. It is better to be proactive than to wait and end up losing large sums of money. 

Most business interruption insurance is for natural disasters rather than pandemics

A pandemic also creates a unique situation for interruption insurance holders. Most of these policies only cover physical damage from things like natural disasters. Some policies will go so far as to specifically exclude closures or illnesses caused by bacterial or viral infections. A few counties in Florida have already been working to try to force companies to pay out these claims for coronavirus losses, or reclassify bacterial and viral damage as a kind of physical damage. 

Talk with an insurance lawyer in Florida

There are attorneys who can assist you with claim denials and other common insurance problems. To speak with a lawyer who focuses on these issues, get in touch with:

The Law Offices of Michael M. Raheb, P.A.

2423 First Street, Fort Myers, FL 33901


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