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As the coronavirus situation continues to develop, it is becoming clear that many businesses will have significant income losses. Some might be shut down for an extended time.
Many of those companies will look to their insurers for recovery, but the issue of insurance for these losses can be murky. If your company is dealing with this issue now, then keep the following points in mind:
First, insurance policies vary, so be careful not to rely on general statements regarding what your company’s insurance program does (or does not) cover.
For example, do not rely on insurance brokers’ summaries, declaration pages, certificates of insurance, or other incomplete information.
Those things are a starting point, not an end point. Get complete copies of the policies. Ideally, have the policies reviewed by an experienced insurance lawyer .
Second, know that typical “business interruption” insurance policy language only applies to losses caused by property damage. This includes related coverages such as;
- contingent business interruption
- civil authority
- extra expense.
Again, however, specific policy language varies and small differences can matter greatly.
Third, although coverage specifically for epidemics is available in the marketplace, not all businesses buy it. Again, your company’s insurance program should be reviewed thoroughly to determine what coverage is, or is not provided.
Fourth, early and decisive action can make a difference, so get counsel involved sooner rather than later. Early advice and guidance from experienced counsel can help maximize the chance of insurance recovery.
Understanding how this affects the small business economy is part of our job here at Santomassimo Davis LLP, as we primarily focus in providing expert Outside General Counsel for a variety of law firms and legal issues related to Corporate and Business Law in New Jersey, New York and Pennsylvania.
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