The COVID-19 pandemic has wreaked havoc on all industries across the nation. There’s no doubt the restaurant industry has been among the hardest hit. Since the start of COVID-19, more than 26,160 restaurants have shut down during the pandemic, with 60 percent of them deciding to shut their doors for good. Now, restaurant owners who have kept their businesses running in some form the last several months or are just now reopening, are facing a very real concern—staff contracting the virus.

Most owners pay significant premiums to for insurance policies to protect their businesses during hard times such as now. Specifically, business interruption coverage is a form of insurance that provides some financial safeguard to business owners whose establishments must close for a period of time due to means beyond their control. This may entail any disaster-related incidents, including, but not limited to, severe weather or a global pandemic. Coverage may include reimbursement for lost profit or added business expenses.

Claim Denials

Businesses that have interruption coverage—approximately one-third of all U.S. businesses—have started filing claims related to mandatory closure orders, but many insurers are denying such claims. Several insurers assert that after previous virus outbreaks, such as the severe acute respiratory syndrome (SARS-I) outbreak in 2002, policies do not include coverage for pandemics. This stance has led to widespread outcry disputing the fairness and legality of denials.

How to Dispute a Denial

Wrongful denials can be remedied through breach of contract lawsuits and, in some cases, bad faith claims against insurers, where their conduct in issuing a denial has been without any merit. But you won’t know if the denial you received was wrongful unless you review it with an attorney.

Despite social distancing requirements that have forced temporary office closures, most attorneys remain available for consultation and are able to take legal action while working remotely. Courts remain operational but under limited public access. With the right assistance, you can get the coverage you purchased so that you’ll be able to reopen your restaurant’s doors.

Timothy L. Salvatore is an insurance bad faith and trial attorney at KBG Injury Law, which has offices throughout Pennsylvania.

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