The coronavirus /COVID-19 pandemic has abruptly stopped the revenue streams of Maryland business owners. It is anticipated that the insurance industry, as a whole, will routinely deny business interruption and loss of business income claims as a matter of course. "The Maryland Insurance Administration is an independent State agency charged with regulating Maryland’s $28.5 billion insurance industry." 1 The MIA has issued guidance on the proper course of action for a business owner struggling with mandatory business closure due to the COVID-19/ coronavirus pandemic.
"We recommend that businesses review their policies and reach out to their insurance professionals with any questions." 1
A thorough review of any policy is the mandatory first step in assessing a valid business interruption claim. Each policy is unique, and a thorough understanding of terms of the insurance policy is a key role of a business interruption claim attorney. The general framework I employ in establishing coverage is to demonstrate:
- Specified loss or damage
- Occasioned by a covered cause of loss, risk or peril
- That is not excluded or limited
Many states are considering legislation that would require the insurance companies to pay for business losses related to COVID-19/ Coronavirus closures. As of this writing, Maryland is not one of those states.
I wholly agree with the Maryland Insurance Administration. I've developed a standard protocol that I suggest taking if you are considering a coronavirus / COVID-19 related business interruption or loss of income.
- Notify your insurance company, and fully comply with all of your obligations under the policy.
- Create a timeline of events pertinent to your businesses closing.
- Meticulously document all of your losses, damages and extra expenses.
- Have an experienced business interruption attorney review your policy for loss of business income coverage.
- Have an experienced insurance dispute attorney determine if other coverage such as civil authority, extra expense, or event cancellation may apply.
I battle insurance companies that have denied claims every day. I’ve litigated thousands of such disputes over the course of my career. If your business has been closed by the State, I’d be happy to discuss your coverage, losses and potential claims with you in a manner of your choosing. Please fill out the contact form on the site, or call me directly at 410-591-2835.
FN 2 Some States have issued advisories with positions similar to Maryland: