Many business owners are baffled. How is that their business interruption insurance policies are not covering losses they have suffered from their business being interrupted?
As with most things insurance-related, the explanation lies in the fine print.
Enter the Exclusion Clauses
Insurance companies learned tough lessons from the 2002-2004 SARS outbreak – a pandemic that proved exceptionally costly for these businesses. This awareness prompted most insurers to add viral pandemic exclusion clauses to their policies.
Insurance industry pundits anticipate a massive surge in litigation as to whether insurers should be held accountable for the interruption of policyholders’ businesses, despite cleverly worded exclusion clauses that are now being interpreted to the insurers’ advantage.
Particularly likely to suffer legal scrutiny are insurance companies whose policies do not include pandemic exclusions – and there are several. Some are even trying to brush off claims when their policies’ language clearly provides for losses resulting from government-ordered closures, such as those issued across the globe in an effort to slow the spread of the novel coronavirus.
One insurance company sure to come under fire is Zurich Insurance.
How Zurich Insurance Has Responded to COVID-19 Claims
Insurance Business UK Magazine asked a number of insurers how they planned to respond to the question that every business wants answered: whether they can file claims on their business interruption policies if the government ordered their businesses to close.
Zurich UK says that they do not cover “non-damage” business interruption. The company further communicated that insurance policies typically list all covered diseases and that Zurich’s policies have never covered pandemic-linked diseases, “due to the difficulty of insurers being able to quantify the potential risk.”
Zurich acknowledges that it does offer policies that cover any infectious disease—but underscores that even if a governmental body orders closures of businesses, this coverage applies only in cases where the disease was actually “present at the premises or in the surrounding area” of the establishment.
The insurer was also quoted in an article published by Insurance Age, which similarly interviewed insurers regarding plans for responding to business interruptions caused by COVID-19. The Zurich spokesperson conveyed that some of its policies “may respond to the impact of coronavirus.”
Finally, a British Broadcasting Corporation article also explored the issue of business interruption coverage. In this piece, the Zurich respondent explained that its policies ‘”generally’ did not provide cover for global events like the coronavirus.”
Zurich Leaves UK Pubs High and Dry
Ei Group, the largest pub company in the United Kingdom, with a portfolio of 4,000 pubs, is insured by Zurich. In mid-March 2020, Ei sent a letter to its pub owners notifying them that Zurich would not be including Covid-19 in its notifiable diseases section and would therefore not be honoring claims for losses from businesses that suffered losses from the virus.
A Lawyer Might Be Able to Help You With Your Claim Denial
A number of business owners are considering taking legal action against insurers like Zurich Insurance, if they do not pay business interruption claims resulting from COVID-19. If your business suffered losses from this pandemic and your insurer denies your claim, the business interruption insurance lawyers at the Law Offices of Anidjar & Levine can help you.
We will review your policy and help you understand your options for compensation. Contact us today so we can get started.
Call the Law Offices of Anidjar & Levine at 1-800-747-3733 for a free consultation.
We Can Help.