Chicago Attorney Handling COVID-19 Insurance Claims

Helping Illinois businesses seek remedies for their losses

Business owners are required to carry insurance policies that protect them when disaster strikes. The most common claims involve disasters you can see: fires, floods, hail, wind, tornadoes. Business interruption coverage helps employers keep their companies running while the damage is remediated. It pays for supplies and relocation costs, and for employee wages, among other obligations. But the coronavirus pandemic does not inflict the type of damage that a fire or hurricane would, and business owners throughout the country are fighting for compensation to protect themselves, their teams, and their businesses.

Gainsberg Law understands what business owners face; after all, we are a small Chicago business, too. If you have been shut down, or if your operation has been drastically scaled back in the wake of COVID-19, we want to help. Our Chicago insurance loss attorneys fight for policyholders whose business interruption claims have been denied. Contact us today to schedule a consultation.

What is business interruption insurance, exactly?

Business interruption (BI) insurance is designed to keep you running, ideally in the black, in the face of a disaster. Your policy should cover the following:

• Restoration and remediation costs for physical damage
• Relocation costs if you are working out of a different place than your regular office
• Income and revenue losses from ruined property and ingress/egress
• Payroll costs and pension funding
• Overhead costs, including mortgages, utility bills, and more
• Failure in the supply chain (if you have purchased contingent business interruption coverage)

All of these things should be covered by your BI insurance, but it depends on the policy you have.

How coronavirus affects covered perils policies vs. all risk policies

There are two basic types of insurance policies: covered perils, and all risk. In a covered perils insurance policy (sometimes called “named perils”), you are covered only for what is listed in the policy, and nothing else. In an all risk insurance policy, you are covered for everything except what has been specifically excluded from your policy.

In the wake of a pandemic, many business owners who have named perils policies have had their claims denied, because “worldwide pandemic” is not listed in their policy. However, those with all risk polices are also being denied.

As such, the lawsuits have already begun. There are two particular arguments that have gained traction regarding coronavirus business interruption claims.

Loss of business caused by civil authority actions

In many policies, there is a provision which states that losses incurred because of civil authority actions are covered losses. Civil authorities include governments and law enforcement agencies. As such, when Governor Pritzker issued his stay-at-home order on March 21^st, that was a civil authority action. Businesses like hair salons, gyms, and sports venues (like Wrigley Field) cannot operate under the order of a civil authority.

Loss of business from physical damage to covered property

Insurers are pushing back against Chicago business owners who claim that their businesses have sustained physical damage related to coronavirus. However, not all physical damage ends in destruction. The coronavirus can live outside of its host for up to three days on materials like plastic and stainless steel. This means any business in Chicago would have to undergo deep cleaning and sanitizing to ensure that it is safe to enter. For businesses like restaurants, retail stores, and even law firms – businesses deemed “essential” because they serve the public – there is a constant risk of infection. These businesses will need to undergo remediation cleaning in order to be safe.

To date, both The Hartford and Travelers Insurance claim that coronavirus does not cause “direct physical damage,” and that they will be covering COVID-19 related claims.