All across Canada, businesses have been forced to close for prolonged periods of time due to the Coronavirus pandemic, leading to billions of dollars in lost commercial revenue. Revenue losses stemming from circumstances such as these are outside of a business owner’s control and should therefore be covered by their insurance. Unfortunately, this has not been the case for many business owners in our area.
Instead, most major business insurers are rejecting all claims for Coronavirus-related losses, stating that this kind of disaster is not included in their policies. If you are one of the many business owners in Barrie who has fallen victim to a Coronavirus business interruption insurance denial, you may want to talk to a lawyer about your legal options for filing suit.
When local business owners purchase business interruption (BI) insurance, they typically do so with the impression that they will be protected if any unforeseen circumstance forces their operations to shut down. For example, if a building fire causes damage to a store, BI insurance would theoretically cover both the costs associated with subsequent repairs and the income lost during its closure of the fire.
However, many policyholders have been left without support during Coronavirus closures because most BI policies specify that a store must sustain some degree of physical damage to be covered by insurance. Accordingly, some insurance companies have argued that they do not have to cover losses related to COVID-19 because the disease does not cause any physical damage to property, even though it has caused extensive financial harm to policyholders and their livelihoods.
Other insurance providers have argued that the pandemic qualifies as a “force majeure” that they are therefore exempt from liability for failing to pay out on valid claims. Many business interruption insurance claims have been denied since the Coronavirus reached Barrie – but that doesn’t necessarily mean local business owners have no possible means of recourse.
Class-action lawsuits have already started in other provinces, the United States, and Europe against several business interruption insurance providers for their failure to pay out on Coronavirus claims. This mass tort claim seeks to establish that insurance companies have failed to abide by the contracts they hold with policyholders, and that they had sufficient knowledge of the damage a pandemic could do that to make a “force majeure” defense invalid. In France, some insurers have already been found to be legally obligated to pay business interruption insurance for some claims.
This logic applies to other insurers elsewhere in Canada, including those in Ontario that have refused to pay out on valid claims. Through such a lawsuit, Barrie business owners who have experienced a Coronavirus business interruption insurance claim denial could seek restitution for various sources of lost revenue, including decrease in customers, forced closures due to federal or provincial orders, and the costs of newly mandated cleaning and decontamination procedures.
If you pay your premiums for business interruption insurance on time and in full, you should be able to expect that your policy will protect you from any external incident that forces your company to close. Unfortunately, far too many business owners in Barrie have suffered unfair business interruption insurance denials during the Coronavirus pandemic.
If your business lost revenue because of COVID-19, you could potentially take legal action against any business interruption insurer that is not honoring their contract with you. Call Rastin Trial Lawyers today to schedule a consultation and discuss the options available to you.