COVID-19 and Business Interruption Insurance

By: Tricia A. Shackelford, Esq., Williams Kilpatrick, PLLC

In the midst of the COVID-19 pandemic shutdown, businesses are suffering and failing.  Many small businesses will struggle to recover from the long weeks of inactivity and reduced or stalled income due to the COVID-19 outbreak and the resulting business closures.  Business interruption insurance may be a source of rescue for the hundreds of small businesses that are scrambling to stay afloat in the era of COVID-19 crisis.

Business interruption insurance helps replace lost income and pay for the expenses of your business when your business suffers a disruption, such as fire, theft, wind, and other acts of God.  No one can deny that COVID-19 is unquestionably an act of God.  The pre-loss earnings of your business are the basis for reimbursement under business interruption coverage.  Business interruption insurance may also cover certain extra expenses.  Most business interruption insurance policies have a “restoration period,” which is the length of time that your policy will cover lost income and extra expenses while you work to restore your business. Typically, the restoration period is 12 months.  

If you have business interruption insurance, you may be able to file a claim related to COVID-19 response mandated business closures and the resulting loss of revenue.  A close review of your business interruption insurance policy will verify your coverage. We are here to help! If you have questions or would like help reviewing your business interruption policy to determine if it will cover your business losses related to the COVID-19 business closures, reach out to me at [email protected] or (859) 629-3302.