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Across the country claims for business income loss presented by policyholders to their insurers and the suits that follow for business interruption caused by COVID-19 and government regulatory closures have not fared well. Most policyholders who have suffered a suspension of business operations have been denied their policy claims when relying on policy clauses covering “direct physical loss of or physical damage” to the policyholders’ place of business. Likewise, when these denied claims become lawsuits, some courts have dismissed cases based on an interpretation that the coronavirus cannot cause property damage at the policyholder’s place of business.…
Continue Reading Barbershop Allowed to Pursue Business Interruption Loss Caused by COVID-19 Pursuant to a Policy Provision Containing Time Element Coverage

I grew up being a baseball player. From the time I was old enough to stand and throw a ball, baseball was a large part of my life. It taught me valuable life lessons like winning and losing, leadership, playing with a team, hard work and dedication. I played all four years I attended Johns Hopkins and even earned some mediocre accolades with these stats. This baseball season was strange due to the pandemic. It was shortened to sixty games, DH across the entire league and the craziest change, no fans. Prior to the Major League Baseball (“MLB”) season starting, I found myself starved for baseball and watching the Korean baseball league on ESPN.…
Continue Reading Major League Baseball Sues AIG Over COVID-19 Claims

The loss of market exclusion excludes from coverage any lost profits due to the business’s market disappearing. The loss of market could be due to economic decline, competition, or shifts in demand attributable to a dramatic occurrence. The question, as usual, is whether that exclusion applies to the claims of lost profit by policyholders that follow a covered peril.…
Continue Reading Understand Business Interruption—Do Not Let the Insurance Company Deny Your Income Claim on Bogus Loss of Market Exclusions

Businesses forced closed by COVID-19 and denied coverage by their insurers received a legal boost this month. In a recent North Carolina ruling, the court held that a commonly worded business interruption policy covered losses arising from closures mandated by COVID-19.…
Continue Reading Court Finds Coverage for Restaurants’ COVID-19 Business Interruption Claims

As the year goes on, state and federal trial courts will continue to tackle legal issues brought on by COVID-19. One recent decision comes from the Middle District of Florida, which recently granted an insurance carrier’s Motion to Dismiss a dental practice’s Complaint brought under the business income and civil authority provisions of the policy.…
Continue Reading Trial Court Grants Motion to Dismiss Complaint Based on Virus Exclusion in Policy

Tuesday at 2 With Chip is Wednesday at 2 today because of a remote and successful GAPIA seminar yesterday. Today, I will go over three topics:

  1. The New Colorado Law Regarding Cooperation Requirements Following Loss
  2. Understanding Business Interruption Concepts
  3. Adjusting Commercial Claims Involving Leases…
    Continue Reading Chip At 2 Today—-New Colorado Cooperation Law, Understanding Business Interruption Concepts, and Adjusting the Lease Exposures

We have made it to the last of the Six P’s and Six E’s, if you have been following this series of business interruption insurance. “Enough” is the last element of these. This is the concept that the policyholder must carry “enough“ insurance to collect for the loss in full. The essence of this is:

[N]ot the obvious fact that the face amount of the policy must be as great as the amount of the loss if the Insured is to collect fully. Rather it is the provision found in most Business Interruption policy forms called a Coinsurance Clause, which penalizes the Insured if the face amount of the policy does not equal an agreed percentage of the total amount at risk-the amount of money that the Earnings Stream would have produced in a period of twelve months if no damage had been suffered-referred to as the Business Interruption Value.1

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Continue Reading The Last “E”—Did the Policyholder Purchase “Enough” Business Interruption Insurance to Avoid Co-Insurance or Contribution?

California Congressman Mike Thompson has filed a bill to help some business owners with business income policies collect benefits for Covid-19-related losses from their insurers.1 Here is a quote from Representative Thompson’s press release explaining his reasons for filing this federal legislation:…
Continue Reading Will Recently Filed Federal Legislation for the Covid Closed Business Policyholder Have A Possibility Of Passage?

“Extra” is the E that largely stands for the concept of expediting costs which are incurred to reduce the ultimate loss. “These are out-of-the-ordinary expenses.”1 They are differentiated from the normal expenses to repair and replace damaged property covered under the property insurance policy. These expediting costs usually fall into three categories:

  1. Those that speed up the return to normal operations;
  2. Those that continue operations during the period of interruption but at a higher than normal cost;
  3. Those incurred, after operations are resumed, to refill inventory.

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Continue Reading What Is the “Extra” E and Why It May Be The Most Important “E” of “The Six E’s” of Business Interruption Insurance?