Businesses that cannot operate during the coronavirus pandemic might find they have to make difficult decisions. Trying to manage inventory, keep employees on payroll, and pay for overhead expenses while you cannot operate can be enough to drive a business under. Fortunately, many businesses have business interruption insurance that should be able to provide coverage for these financial stressors. However, your insurance company might try to deny your claim, and you might need help getting the money you need.
The Texas COVID-19 business interruption claim litigation attorneys at The Queenan Law Firm represent businesses whose insurance companies have denied business interruption claims or refused to cover damages. For help with your case, call our law offices today to set up a free legal consultation. Our phone number is (817) 476-1797.
Suing Texas Insurance Companies for Denied Coronavirus Business Interruption Claims
Insurance companies are required to make a good faith effort to follow the insurance policies they sign with customers. When your business is in a difficult situation and you have paid for insurance, you deserve to get the funds you were contracted to receive. Insurance companies can often be taken to court on two major grounds to help businesses and individuals get the coverage they deserve:
Breach of Contract
The first ground for suing an insurance company is breach of contract. An insurance policy is a contract that dictates when the insurance company is required to pay the insured. If your insurance policy covers your current situation, then the insurance company is required to pay. If they do not, you can sue them for breach of contract.
In many cases, the specific terms of your insurance policy might have ambiguous wording or potentially contradictory terms that the insurance company is interpreting in their favor. For instance, with COVID-19 business shutdowns, there is usually no damage to the property. Your insurance policy might say that it only pays damages when there is property damage, such as in the case of a business interruption caused by fire or wind damage. With the coronavirus, insurance companies might try to refuse to pay. However, other clauses for business interruptions caused by government orders or other situations might be explicitly covered. A breach of contract claim might allow the court to enforce the terms of the insurance policy that help you and order the insurance company to pay you what you deserve.
Bad Faith Insurance
The second major ground for lawsuits against insurance companies is a claim that they acted in bad faith. Insurance providers are required to follow a duty of good faith. This means that they must make a good faith effort to pay their customers the money they deserve under the insurance policy. If the terms of the policy do not cover a certain situation, the insurance company can make a good-faith argument that they are not contractually obligated to pay, and the case can be handled as a breach of contract claim. However, insurance companies sometimes deny claims with no good excuse or they take extensive steps to delay claims without ever moving the claim closer to being paid. In these cases, there might be no true effort to deal in good faith. That usually entitles the insured business or individual to file a bad faith insurance claim against the insurance carrier.
Reasons Insurance Claims for COVID-19 Business Interruptions are Denied in Texas
There are many potential reasons an insurance claim might be denied for coronavirus business interruptions. Sometimes, the claim is denied because there is not enough information in the claim or the claim was filed improperly. Barring these kinds of issues, insurance companies usually deny these kinds of claims for a few particular reasons.
First, the insurance policy might not cover business interruption that has no physical damage to the business premises. As mentioned, payouts for fires or wind damage are common, but with a virus, there is likely no damage to the premises. These kinds of denials can be overcome if other clauses in the insurance policy allow for payments when there is a government closure order or some other problem.
Second, some insurance policies specifically exclude illness from the causes of interruption that the policy covers. This would exclude claims where your business had to shut down because too many workers got COVID-19. However, if your business shut down because of government orders, not directly because of the coronavirus, this clause might not deny your claim.
Lastly, many of these claims are denied without good cause. It is these kinds of cases where a bad faith insurance claim is often appropriate.
Damages for Businesses Interrupted by Coronavirus in Texas
If your insurance company denied your business interruption claim and you take them to court, you will first be entitled to claim whatever payments they should have already paid. These contract damages will be dictated by the insurance policy and would usually include operation costs, profits, and other business expenses you cannot afford while your business is shut down. This could cover things like commercial rent payments, payroll, lost profits, lost inventory costs, damages for contracts you cannot meet, and other payments you need.
You might also be entitled to additional damages because the insurance company unfairly denied your claim. This could include damages for attorney’s fees, punitive damages to punish the insurance company, and other payments. Talk to a lawyer about what your business interruption claim might be worth.
Call Our Texas Lawyers for COVID-19 and Coronavirus Business Interruption Litigation
If your business was put on hold as “non-essential” or you are unable to continue operations because your workers are sick, you might be entitled to coverage from your business interruption insurance. If your insurance carrier is giving you a hard time and refusing to pay what they owe you, our Texas COVID-19 business interruption claim litigation attorneys might be able to help. Call us today to schedule a free legal consultation and learn more about taking your insurance company to court on breach of contract or bad faith claims. Our number is (817) 476-1797.