EXTRA EXPENSES COVERAGE
Extra Expense Coverage allows for you to recover the necessary expenses you incur during the “period of restoration” that you would not have incurred if there had been no direct physical loss or damage to your property caused by or resulting from a Covered Cause of Loss. An insurance company will pay the extra expense to (1) avoid or minimize the “suspension” of business and to continue operations at the described premises or at replacement premises or temporary locations, including relocation expenses and costs to equip and operate the replacement location or temporary location, and (2) minimize the suspension of business if you cannot continue operations.
EXTENDED BUSINESS INCOME RELIEF
Additional business income relief may be available if the necessary suspension of your operations produces a Business Income loss payable under the policy. Such coverage is designed to provide financial coverage for the period of time in which the cause of loss has been remedied and the operations reasonably resume. However, Extended Business Income does not apply to loss of business income incurred as a result of unfavorable business conditions caused by the impact of the Covered Cause of Loss in the area where the described premises are located.
Insurers will likely argue that such coverage isn’t available since the continued loss is caused in part to the fact that all businesses are “ramping up” so to say and therefore the competition amongst each other, rather than the covered loss, is causing the slowed profits. Such an interpretation would defeat the purpose of such coverage and will be hotly contested in litigation proceedings to come.
Again, this will be litigated around the county as courts have drawn different conclusions about this issue.
CIVIL AUTHORITY COVERAGE
Civil Authority Coverage applies when there is an order or action issued or taken as a result of (a) physical loss or damage or (b) perils insured against to property adjacent to the insured premises or within a certain distance thereof, which prevents, prohibits, or impairs access to the insured premises.
When deciding whether Civil Authority is triggered, it is imperative to look to your state and local orders which should state the purpose for the order.
Civil authority coverage for business income will begin 72 hours after the time of the first action of civil authority that prohibits access to the described premises and will apply for a period of up to four consecutive weeks from the date on which such coverage began.
Civil Authority Coverage for Extra Expense will begin immediately after the time of the first action of civil authority that prohibits access to the described premises and will end upon the later of 1) four consecutive weeks after the date of that action, or 2) when your civil authority coverage for business income ends.
BUSINESS INCOME COVERAGE
Business income coverage is for a commercial property covering loss of income suffered by a business when damage to its premises by a covered cause of loss causes a slowdown or suspension of its operations. For such a claim to succeed, the “suspension” must be caused by direct physical loss of or damage to property, and the loss or damage must be caused by or a result from a covered cause of loss.
“Physical loss” or damage is “any impact on property which prevents the property from being used for its intended purpose” which can include contamination of bacteria. This definition puts the Coronavirus in play as something that may be able to validate a BIC claim. Insurance carriers can be expected to deny such coverage as most businesses cannot prove the actual presence of the virus on the premises; however, it will be argued that the fear of the virus’ presence is enough to invoke such coverage.
Some insurance policies include an “exclusions” section. Such sections seek to limit coverage depending on certain circumstances, often including things like bacteria or viruses. Such exclusions are not alwyas present and not always an impediment ot a successful claim. Therefore, despite the existence of such an exclusion, you should always consult an attorney and request that they review your policy to determine whether you may be entitled to compensation for your loss.
WHAT IS BUSINESS INTERRUPTION INSURANCE?
Business interruption insurance is intended for multiple reasons. It promises to compensate the insured for the income that was lost during the time period of interruption resulting from disaster. Extended business interruption coverage pays for the income that is lost after the property is repaired but before the income returns to the pre-loss level. Contingent business interruption provides the insured with coverage for loss to the property of suppliers or consumers of its products or services.
The case law relating to this area is evolving rapidly, especially with the onset of the Coronavirus. Alexander Shunnarah Injury Attorneys will thoroughly review your policy to help determine what coverage may be available to you and your business. Even if your policy contains an exclusion for pandemic-related losses, there is a chance your policy may in fact cover financial losses related to the Coronavirus. Contact Alexander Shunnarah Injury Attorneys as soon as possible, as states are currently pondering new legislation regarding Coronavirus.