COVID-19 Realities May Be Very Different From What Policyholders Are Being Told by Their Insurance Company
COVID-19 Executive Orders issued by the governors of Illinois and Indiana have caused widespread losses of revenue and profits for all sorts of businesses in our part of the country. As a result, business owners with commercial insurance policies are looking for their insurance carriers to cover these “business interruption losses.” Meanwhile, the insurance industry has made it clear that these claims will be disrespected and denied.
From the perspective of injury victim advocates who have dealt with insurance companies and their defense lawyers for many years, it is infuriating to think that courtroom battles will have to be fought in order to force these companies to do the right thing insofar as business interruption losses. However, this is the reality facing most commercial policyholders in Illinois and Indiana with business interruption losses caused by the Coronavirus Pandemic.
It is important that victims of commercial economic injury as a result of COVID-19 understand there may be a need to insist upon justice in the courthouse based upon an insurance policy, after reliably paying premiums for many months or years. It is also vital that corresponding misinformation be dismissed and discounted, especially when it serves only to discourage policyholders from pursuing justice in these matters.
For everyone in Indiana and Illinois, we provide five things you should know about Business Interruption Insurance Coverage in Indiana and Illinois:
1. The Advice of Insurance Agents and Insurance Adjusters
Over the years, you may have developed a relationship with your insurance agent. If you have filed a business interruption loss claim, you may also hear from the carrier’s insurance claims adjuster.
These people may be very nice and congenial. However, they are employees of the insurance company. Any statements they make, or advice they give, regarding either filing a claim or the finality of a filed claim being denied, must be considered as coming from the company’s best interests.
These claims cannot be summarily adjudicated by either the agent or the adjuster. Beware of attempts by insurance company spokespeople to suppress claims being filed for coverage of business interruption losses.
For more on the tactics and past history of America’s biggest insurance carriers, read the 29-page report by the American Association for Justice entitled “The Ten Worst Insurance Companies In America: How They Raise Premiums, Deny Claims, and Refuse Insurance to Those Who Need It Most.”
2. Each Individual Insurance Policy Stands On Its Own Language
Commercial insurance policies are detailed and verbose. The insurance carrier’s logo will be emblazoned on page after printed page, and it may be tempting to assume the wording in these policies applies as a general rule to everyone.
This is not accurate from a legal perspective. Insurance policies must be individually reviewed word by word, and interpreted as a whole. Legal precedents must be researched, as well, to learn how courts may have interpreted some of the phrasing.
The wise policyholder will have a legal expert review their individual policy to determine if there is clear coverage for business interruption losses in its provisions, as well as if there is an argument to be made that wording in the policy supports the position that their claim should be paid.
3. Past Court Cases May Help Decide Your Right to Coverage for Business Interruption Losses
Lawsuits may have to be filed before business interruption losses are covered by the insurance carrier because of the need to have a judge rule (and order) that the claim should be paid. The judge has the ability to make a legal determination based upon the state laws of Indiana and Illinois, as well as looking to other case precedent.
For instance, a claim filed in an Indiana state courthouse may have a judge considering how a federal court ruled in a similar situation several years before. Cases filed in federal court that interpret things like what constitutes “property damage and loss” for business interruption claims may shine a clear light on the COVID-19 case now before the judge. Cases filed in sister states may be enlightening, as well (such as the Florida and Louisiana decisions dealing with business interruption losses in the aftermath of Hurricane Katrina).
Litigation may seem overwhelming to the policyholder, especially after the stress of this unprecedented Coronavirus Pandemic. However, formally going before a judge may be necessary in order to argue analogous situations in past cases after the insurance carrier dismisses them and refuses to pay.
4. Losses May Be Covered By Various Provisions of the Commercial Policy
Many carriers are focusing upon policy language dealing with damage to business property when considering business interruption claims. However, for many commercial insurance policies there may be language independent from the business loss provisions that support payment of the claim.
One example involves policy coverage for “civil authority” closures of business operations. Time and again in Indiana, Illinois, and other parts of the country, the government has taken action that hampers or blocks access to the business premises. Arguments can be made that restricting access via the state-wide Executive Orders provides for coverage of business interruption losses based upon the “civil authority” provisions of the policy.
5. Insurance Industry Arrogance Does Not Correspond to the Legal Realities
The COVID-19 Pandemic is unparalleled. Never before has our entire national economy been shut down due to a public health emergency.
Insurance companies, especially their adjusters and defense attorneys, are diligent and determined to find ways to avoid paying claims or minimizing liability. Their focus is continuously upon the company’s bottom line and maximizing its profits at all times, in all types of claims.
The industry wide knee-jerk response to COVID-19 business interruption loss claims has been to disrespect them summarily, if for no other reason than Coronavirus exposure is a new and extraordinary cause for damage.
Nevertheless, policyholders in Indiana and Illinois must recognize that in the real world, the insurance industry does not get to decide its legal liabilities. If challenged, then it is up to the courts to determine if the claim is valid and the carrier duty-bound to cover the losses.
Business interruption claims, by the insurance industry’s own posturing, are being forced into the state courtrooms of Illinois and Indiana. Whether or not a business interruption loss claim is covered by a commercial insurance policy and must be paid by the carrier is a decision that will be made by a judge.
Legal Review of Commercial Insurance Policies to Determine Bases for Coverage
Anyone who has suffered a business interruption loss in Illinois or Indiana should consider getting an expert opinion on their specific commercial insurance policy’s language. The particular provisions of the contract may provide several bases for demanding the carrier cover their business loss claims.
For more on Coronavirus-related Lawsuits, read:
- “Coronavirus Lawsuits and COVID19 Legal Claims in Indiana and Illinois: Wrongful Death or Serious Injury;” and
- “Deadlines for Injury Victims to File Lawsuits: Statutes of Limitations.”
For more on Insurance Company Bad Faith, read:
- “Bad Faith: When an Accident Victim is Victimized a Second Time by the Insurance Company”;
- “Insurance Company Has Duty to Settle Your Claim: Bad Faith Lawsuits Against The Insurer”; and
- “The Law of Bad Faith Insurance Claims in Indiana and Illinois.”
The courts of Indiana and Illinois have been established to provide injured victims a place where wrongs can be righted and justice can be found. Business owners must consider if their commercial policies provide coverage for their COVID-19 losses. Please be careful out there!
