A group of restaurateurs in the Buckeye State have joined a growing list of coronavirus-related business interruption denial claimants in federal courts nationwide.<\/p>\n
Several other kinds of coronavirus lawsuits are working their way through the judicial system.<\/p>\n
Highlights include class action lawsuits against airlines and ticket retailers for failure to give refunds and wrongful Paycheck Protection Program loan denials.<\/p>\n
In 2018, the American insurance industry collected over $1.8 trillion<\/a><\/u> in premiums. Much of that money paid for business interruption insurance policies.<\/p>\n Typically, these policies cover losses related to action civile<\/a> closures or physical damage to the insured property. More on these things below.<\/p>\n As far as the insurance companies are concerned, business interruption policies cover losses related to fires, hurricanes, tornadoes, and other natural or no-fault disasters.<\/p>\n Characteristically, the wording in these policies is rather vague.<\/p>\n That vagueness is a double-edged sword. Insurance companies can use it to avoid paying claims, and Avocats<\/a><\/u> can use it to force payment.<\/p>\n Following the SARS (Severe Acute Respiratory Syndrome) outbreak in the early 2000s, a few insurance companies re-wrote their business interruption policies.<\/p>\n They specifically excluded infectious or contagious diseases. But most insurance companies did nothing.<\/p>\n Time is of the essence in this area.<\/p>\n Most policies require policyholders to report covered losses within a few days or weeks.<\/p>\n If the report is late, the insurance company has an independent reason to deny the claim.<\/p>\n Stay-at-home orders vary, but for the most part, they force restaurants to close their dining rooms and restrict service to takeout and delivery.<\/p>\n A few jurisdictions also have mandatory facemask laws which make it illegal to enter any business without wearing a surgical mask.<\/p>\n These laws reduce restaurant patronage even more.<\/p>\n Police can and do issue citations for violating stay-at-home and\/or social distancing orders.<\/p>\n This enforcement has a substantial chilling effect.<\/p>\n The economic impact is more than just direct and immediate.<\/p>\n If restaurants are forced to close their dining rooms for a prolonged period of time, many customers will change their dining habits.<\/p>\n Even after the powers that be lift coronavirus restrictions, a significant number of customers might never return, or they might only return sporadically.<\/p>\n Many business interruption policies state that closure due to civil action is a covered loss.<\/p>\n Most insurance companies contemplated things like closures related to civil unrest, such as riots or wars.<\/p>\n Since such events are extremely rare in America, most insurance companies never thought they would have to pay on these policies.<\/p>\n Currently, the debate centers on the definition of \u201cclosed.\u201d<\/p>\n If the policy has a civil action clause, many insurance companies claim that the loss is not covered if the restaurant is open for limited purposes.<\/p>\n Financial records are often relevant.<\/p>\n If, as is normally the case, the restaurant\u2019s business trickled down to almost nothing in mid-March 2020, a strong case can be made that the restaurant was effectively closed.<\/p>\n As mentioned, most business interruption policies contain physical damage clauses.<\/p>\n The insurance company pays if a natural or no-fault disaster forced the restaurant to close. COVID-19 certainly fits into this category.<\/p>\n However, insurance company adjusters often argue that coronavirus is a contagious disease which causes no physical damage.<\/p>\n That\u2019s despite evidence that coronavirus remains on cardboard, stainless steel, glass, plastic, and other hard surfaces for up to soixante-douze heures<\/a><\/u>.<\/p>\n That fact, along with the quarantine and loss of business, is often enough to convince a factfinder that payment is appropriate under the policy.<\/p>\n Once liability is established, insurance companies usually have a duty to promptly pay covered losses.<\/p>\n The payment must be for the full insured value. Depreciation or partial opening does not justify partial payment.<\/p>\n Additionally, if policyholders must work with lawyers to defend their rights, the insurance company is usually responsible for all legal fees.<\/p>\nAction civile<\/h2>\n
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