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COVID-19 Property Loss Claims


Individuals who suffer property loss could be entitled to compensation if they have the appropriate insurance policies. Most of us may imagine that this situation only arises in cases where a person’s home, business, or vehicle sustains physical damage as a result of fire, flood, natural disaster, or someone else’s criminal activity. However, in a few recently filed lawsuits, a number of plaintiffs have alleged that the losses suffered by their businesses as a result of the COVID-19 pandemic should also qualify as physical damage, and so qualify for compensation under Business Interruption Insurance policies.

The outcome of these cases remains to be seen, so many business owners in Pennsylvania will be left wondering about their legal rights in the meantime. For help interpreting your own policy or to speak with an experienced property loss claim denial lawyer about a claim that has already been rejected, please call our office today.

Business Income Coverage

Business interruption insurance provides policyholders with financial compensation in the event that a company suffers an actual loss of income due to the necessary suspension of operations. However, to qualify for coverage, the suspension in business operations must be the result of a direct physical loss of or damage to the business’s premises. Furthermore, the damage must have been the result of a cause listed specifically in the policy.

Does COVID-19 Create Physical Loss?

Since the COVID-19 pandemic, a variety of insurers, policyholders, and judges have started to grapple with the issue of whether a virus can cause physical loss or damage to a business. Many business owners, for instance, claim that physical loss or damage should include any impact on a property that prevents the premises from being used, which can include contamination. One California court even recently held that a policyholder could make a claim for business income and expense loss because of an E.coli outbreak.

The causation element of a business income loss claim will also undoubtedly cause confusion for claimants, as we can expect most insurance carriers to deny claims based on COVID-19 by raising the argument that businesses cannot actually prove that the virus is present on their premises. Furthermore, many policies include exclusions, which limit coverage in specific circumstances, so some insurers may point to these provisions in an effort to avoid paying out a claim.

Losses Based on Civil Authority

Policyholders may also be covered for losses sustained as a result of civil authority, which applies when the government issues a closure order due to:

  • Physical loss or damage; or
  • Perils within a certain distance of the premises that prevent or impair access to the property.

In the past, courts have interpreted civil authority contract provisions as not requiring physical damage to trigger coverage. Instead, coverage can be activated when a government’s actions, such as a stay-at-home order, causes business interruption and financial loss. For help determining whether the civil authority provision in your own insurance contract has been triggered, please call our legal team today.

Call a Dedicated Philadelphia Property Loss Claim Denial Attorney

If you have suffered business losses due to the COVID-19 pandemic, you could be entitled to compensation from your insurer, please contact experienced Philadelphia property loss claim denial attorney Louis S. Schwartz at CONSUMERLAWPA.com today to learn more about your legal options.




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