Business Interruption Insurance

Businesses across Canada are feeling the loss at all levels including restaurants, bars, entertainment venues, schools, charitable organizations and professional service providers.

Has Your Business Interruption Insurance Claim Been Denied?

Recent media updates have indicated insurers are not ready to payout claims for business interruption insurance caused by COVID-19. The WHO officially designated the recent outbreak a pandemic just last week. This qualification means hard working Canadians may rely on this coverage to keep their business afloat during the work stoppage.

Even after the virus persists in an area, re-contamination could occur again and extend your period of coverage. It is essential that every business owner full understands what they are entitled to under their business insurance policy.

What is business interruption insurance?

Business interruption insurance is a type of insurance that covers the loss of income that a business suffers after a disaster. The income loss covered may be due to disaster-related closing of the business facility or due to the rebuilding process after a disaster.

Many professional services companies have clauses in their coverage which allow for coverage in the event of a pandemic.

These could include but are not limited to:

• Doctors
• Lawyers
• Accountants and Accounting firms
• Dentists

“This is classic insurance tactics,” said Jeremy Diamond, Senior Partner at Diamond and Diamond Lawyers. “Hours after the government took steps to protect its citizens, they were pushing a media narrative that indicated they would be denying claims on a large scale.”

While not all insurance policies include extra coverage for pandemics, thousands of businesses across the country are eligible for business or supply chain interruption payouts. Manufacturers are shutting doors and business continuity may be affected into as late as fall. While the government is taking steps to mitigate against economic loss it may not be enough to lessen the fallout.

If your business model has been interrupted your insurance may cover:

• fixed costs
• supply chain losses
• payroll losses
• loan payment losses
• revenue losses
• relocation costs
• physical loss/damage or destruction
• miscellaneous incurred expenses

“Every policy is different so it’s important that a lawyer combs through your policy and analyzes the facts and policy language,” said Sandra Zisckind, managing partner at Diamond and Diamond Lawyers.

According to JDSUPRA.com:

Policies may provide coverage for business income loss due to interruptions in the supply chain through contingent business interruption coverage (i.e., customers, suppliers) or dependent property coverage (i.e., manufacturers, locations that accept products). The reason for this interruption must be due to a covered cause of loss.

Under the “civil authority” coverage, if a government agency prohibits access to the business’s premises, the resulting business losses may be covered. This clause usually requires that a covered cause of loss cause damage to another property within a certain distance from the insured business.

Are you a professional service provider or owner of a business in Canada? You may be entitled to coverage under your policy.

Contact our firm for a free analysis today to determine if you are eligible for Business Interruption insurance coverage.

Our firm has experience taking on big insurers who have denied legitimate claims to their policy holders.