Complicated terminology is being applied with abandon to what alternately is being called the coronavirus pandemic, the SARS-CoV-2 pandemic, and the COVID-19 pandemic. Pandemic refers to the geographic reach of a disease and not to its intensity or to its capability to readily infect people, to its level of contagiousness.
While the geographic extent to which COVID-19 reaches is alarming, in the end attention must also be paid to individuals and families who find their lives upended in different ways because of the novel coronavirus. Of course, the health and medical impact of COVID-19 is shocking. In addition, the economic impact of this health crisis (and the COVID-19 pandemic fairly can be called a crisis) is proving devastating for people from all walks of life. This includes Houston small and midsize business owners. A member of The Doan Law Firm business loss insurance lawyer team discusses the state of Houston business interruption insurance claims today.
Houston Business Owners That Planned Ahead: Business Interruption Insurance
Thoughtful, diligent, proactive Houston business owners oftentimes have taken the important step of obtaining business interruption insurance coverage. In basic terms, this type of insurance policy pays to a business owner a set amount of money should a company be shut down as the result of some type of natural or even manmade event beyond the control of such an entrepreneur. In the greater Houston area, the most commonplace examples of when business interruption insurance claims are filed and pursued are in the aftermath of severe storms that have plagued the area for years.
A large number of Houston area businesses have seen a significant drop in their revenue because of a situation well beyond their control – the COVID-19 pandemic. This in particular has been the case since the Stay at Home, Work Safe order came down during the last week of March. The directive permits only specifically defined essential business enterprises the ability to maintain close to normal operations. Examples of such business include grocery stores and medical practices.
A yet unknown number of Houston businesses took some initial comfort in the fact that they obtained what they believed to be an adequate business interruption insurance policy. Sadly, as many of these businesses reached out to their insurance brokers or insurance companies, they learned that a claim for business interruption financial losses were deemed by insurers a not covered under the terms and conditions of existing business interruption insurance policies. To say that this has proven to be shocking news for one Housing business owner after another is a blatant understatement.
2003 SARS Pandemic and Business Interruption Insurance
Prior to the SARS (Severe Acute Respiratory Syndrome) pandemic of 2003, Houston business interruption insurance policies typically did include coverage for a business shutdown caused by a health situation like an epidemic. In the aftermath of the SARS pandemic, insurance companies rather quietly inserted exclusions for business interruptions caused by viruses and bacteria, which is at the heart of the what is proving to be a crisis today.
As noted, many Houston area business owners are stunned to learn their claims for coverage pursuant to their business interruption insurance policies have been denied or are expected to be turned down. Frankly, some of these Houston small and midsize business owners are apt to have been told at the time they obtained a business interruption insurance policy that a shutdown event like the COVID-19 pandemic would trigger coverage and compensation for them. There may be some other reasons why what technically are known as unfair claims settlement practices and other legal issues may be afoot in regard claims made under Houston business interruption insurance policies.
Governmental Leaders Respond to Exclusion of Coverage for COVID-19 Business Shutdowns
A growing number of governmental leaders across the country have become aware of and concerned exclusionary provisions in business interruption insurance policies that (at least for now) seem to be leaving hard-working business owners out in the cold when it comes to compensation for losses beyond their control, associated with the COVID-19 crisis.
If you’re small or midsize business owner that finds yourself facing a business interruption insurance claim denial, contact a business loss insurance lawyer from our firm at (832) 835-0000. We can schedule an initial consultation about your situation at our conveniently located office:
The Doan Law Firm
1 Riverway
Suite 2500
Houston, Texas 77056
(832) 835-0000
There is no charge for an initial consultation. Our firm never charges an attorney fee unless we win for you.