What Should a California Business Do to File a Business Interruption Claim for Loss of Income Due to COVID-19?

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The coronavirus has caused extensive economic devastation to an innumerable amount of businesses. As federal, state, and local governments have enacted shelter-in-place and social distancing orders, customers that would typically fill the stores and restaurants are stuck at home, many unemployed. To get your business and employees through this pandemic with financial security, you must seek out options of financial assistance through multiple channels, insurance being one example. Business interruption assistance can be requested through your insurance provider and can be one of the more reliable methods of supporting your business during this time. If you have been affected, the experienced coronavirus business interruption insurance lawyers at Salamati Law in California have provided a very important guide to keep in mind when filing a business interruption claim as a business owner within the state of California. 

California’s Support for Business Owners Amid COVID-19

California has expressed distinct leadership amid the economic damage that has been dealt to business owners in the state. Insurers have, unfortunately, left many of their clients high and dry during this time, primarily under assertions that the claims filed fall short of qualifications for approval. For example, many insurance providers have rejected claims under the assertion that the ongoing pandemic has not been the direct cause of business interruption, disqualifying the claims for approval. 

California has enacted new policies to combat this and to ensure that providers are not cheating their clients out of assistance. These policies require that insurers comply with their contractual obligations to provide their clients with full investigations of their claims, a clear rejection or approval within 40 days, and more. With the support of the state behind you, you can feel confident moving forward in your request for assistance during this time. 

Filing for Business Interruption Insurance

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The process of requesting assistance for business interruption insurance will primarily involve two primary steps:

  1. You must carefully review the details of your policy and understand what it does and does not cover. (For example, there may be a clause in your policy that excludes viral and bacterial outbreaks.)
  2. Gather thorough documentation reflecting losses and expenses incurred due to the pandemic and government mandates related to the pandemic.

Once you have completed these steps and have a thorough understanding of your qualifications you are ready to apply. Typically, an insurance policy will require that you provide written notice of your losses as soon as you are aware of them. This may not be possible for everyone, as it takes a while to identify how the pandemic will affect you. Do your best to notify your insurer as soon as possible. 

If your claim is rejected, you may be eligible to file a complaint against the insurer. Denials that are based on an unreasonable or inappropriate cause are known as “bad faith denials,” and are characterized by the following traits:

  • Unreasonable denial of a claim
  • Inexplicable delays in the claims process
  • Termination of the claim
  • Reimbursement amount to less than what was requested

If you have been denied business interruption insurance during this time, the best option for your business continuity is to file a lawsuit against your insurance company. Get in touch with an experienced lawyer to keep your business afloat during the ongoing coronavirus pandemic.

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