In addition to the previously unheard of phrase “Force Majure,” Business Interruption Insurance is surely to become one of the most popular search phrases in 2020 due to the COVID-19 Pandemic. Business Interruption Insurance provides for reimbursement of loss in times of a disaster.
Within the initial days of the pandemic, we saw Chef Thomas Keller file a claim with his insurer Hartford Fire Insurance Company. Immediately followed by a preemptive lawsuit against Hartford on the basis of “information and belief” that his insurer would deny coverage. Keller, an industry powerhouse, helped set the tone for businesses large and small to begin reviewing their policies and file claims.
The challenge is that since the SARS outbreak of the early 2000’s many insurers wrote in specific exclusions against pandemics. This, after companies such as Mandarin Oriental International Ltd. received $16 million in payments from it’s insurers. Though now we’re seeing elected officials step into the ring in an effort to support local businesses and protect their communities.
San Francisco County Supervisors recently adopted a non-binding resolution, proposed by Supervisor Alexander Mar, which states in part “that Covid-19 is an extreme danger to the public because of its propensity to adhere to surfaces and spread, which causes property loss or damage.” It urges the state insurance commissioner & legislators to take action. They hope too that their resolution will suffice as proper evidence from a local authority. Which is necessary for businesses to show when filing claims.
While it’s too soon to know what the results of these efforts will be. It surely will be an interesting fight to watch unfold.
