Will FL Business Interruption Insurance Cover Your Coronavirus Losses?


In Florida and around the country, there is one pressing topic on everyone’s mind: the coronavirus. For many South Florida business owners, times can be particularly harrowing. Not only do they have to worry about the spread of COVID-19 among their community and loved ones, but many are also struggling with financial woes.


Across the state and most regions in the U.S., restaurants, bars, casinos, and entertainment venues are being forced to close or limit service to takeout and delivery only. Stores are being made to shorten their hours and check customer count. Travel is being restricted, cruise ships quarantined, and major events are being canceled.


As coronavirus panic spreads across South Florida, many cities have even imposed curfews — including Palm Beach and Miami Beach.


The coronavirus has hit our economy hard. So as South Florida businesses shoulder financial losses in their operations, many are turning to insurance companies with coronavirus business interruption claims… and they are being denied.


What Is Florida Business Interruption Insurance?


As a forward-thinking business owner, you may have opted to receive business interruption coverage under your commercial property damage insurance policy. Many South Florida businesses obtain business interruption insurance to cover losses caused by natural disasters and other emergencies.


Since business interruption insurance is designed to protect business owners against risks associated with disasters, you would think your business losses caused by the coronavirus — one of the biggest disasters of our time — would be covered by business interruption insurance.


That’s not necessarily the case, though.


Insurers Require “Direct Physical Damage” to Pay a Disaster Claim


As many business owners in Florida are discovering, most losses sustained during the coronavirus crisis aren’t covered by business interruption policies because these plans don’t cover damage from disease and virus outbreak.


Typically, policies require that businesses sustain “direct physical damage” as a result of a disaster in order for a business interruption claim to be paid.


Business Interruption Contingency Clauses Do Too


In some cases, plans include a business interruption contingency clause that covers interruptions arising from disruptions in their supply chain. Contingent business interruption still generally requires the underlying cause of the interruption to have been caused by direct physical damage.


As a result, many insurance companies are denying claims for coronavirus-related business interruption because they do not allegedly satisfy the “direct physical damage” requirement.


Consequential Economic Losses Aren’t Typically Covered


With most plans, direct physical damage does not include consequential economic loss.  In situations where your business has been forced to shutter or limit hours — but is otherwise undamaged and uncontaminated — you may find that your insurance provider will deny your coronavirus claim due to a purported lack of direct physical loss.


What to Do If Your Business Interruption Claim Is Denied by Your Florida Insurer


What to Do If Your Business Interruption Claim Is Denied by Your Florida Insurer



Does this mean you should abstain from trying to file a business interruption claim related to the coronavirus? Again, not necessarily. Every policy is different, and whether or not your claim will be honored will depend on the specific facts and terms of your policy.


Given that your insurance company is likely to fight tooth and nail to avoid payout, and it’s worth reviewing the language and contractual clauses in your business interruption clauses with a knowledgeable Florida business insurance claim attorney to determine your rights.




About the Author:

Andrew Winston is a partner at the personal injury law firm of Winston Law. For over 20 years, he has successfully represented countless people in all kinds of personal injury cases, with a particular focus on child injury, legal malpractice, and premises liability. He has been recognized for excellence in the representation of injured clients by admission to the Million Dollar Advocates Forum, is AV Preeminent Rated by the Martindale-Hubbell Law Directory, enjoys a 10.0 rating by AVVO as a Top Personal Injury Attorney, has been selected as a Florida “SuperLawyer” from 2011-2017 – an honor reserved for the top 5% of lawyers in the state – and was voted to Florida Trend’s ”Legal Elite” and as one of the Top 100 Lawyers in Florida and one of the Top 100 Lawyers in the Miami area for 2015, 2016, and 2017.