To say that businesses are struggling financially in the wake of COVID-19 is an understatement. Business owners in nearly every industry have been severely impacted by government-mandated shutdowns: losing profits, defaulting on rent, going without income, and in some cases even closing their doors for good.
A recent U.S. census survey showed that over 50 percent of all businesses have been negatively impacted by COVID-19. In some industries, including the accommodation and food services sector, over 80 percent report suffering major losses.
For many business owners, the worst part about this situation is that they purchased business interruption insurance, assuming that it would protect them in these types of scenarios. But instead, insurers are outright denying the vast majority of COVID-19 related claims. Unfortunately, many business owners whose claims have been denied have given up hope when in reality, there are legal options you can pursue to get compensation. Below I’ll explain the situation and tell you more about what you can do if your claim is denied.
Understanding the Pandemic Exclusion Clause
Usually, business interruption insurance protects businesses if property is damaged by a fire or a natural disaster. Some policies also include what is known as a civil authority clause, which covers income loss due to government-mandated business closures. Since both of these scenarios could potentially apply to businesses that have been shut down due to COVID-19, many business owners are puzzled about why their claims are being denied.
Here’s the catch: between 2002 and 2004, when SARS was spreading throughout much of the world and causing widespread disruptions, insurance carriers began adding an exclusion to their business interruption policies known as a pandemic exclusion clause. In a nutshell, if your policy contains a pandemic exclusion clause (and it’s very likely that it does), you are covered for any business interruptions except those related to a pandemic.
If you’re like most business owners and your claim was denied due to the exclusion, you probably assumed it was impossible to be compensated for your losses. Some business owners whose policies contain the pandemic exclusion clause have not even bothered filing business interruption claims because they assume their claim will be denied.
The truth is that whether your claim has been denied or you have not yet submitted a claim, you should not give up because there are lawsuits currently in progress that offer hope to business owners in this situation. At Buttafuoco & Associates, we are handling many of them and are hopeful that we can help businesses receive the compensation they deserve.
How to Take Action if Your Claim is Denied
Whether your claim has already been denied or you are worried that it will be, there are low-risk lawsuits already underway to help business owners receive damages for COVID-19 losses. How is this possible with the pandemic exclusion clause in place? Buttafuoco & Associates has found what we believe will be a successful legal workaround to protect businesses from the exclusion and we are heading up a large multi-district litigation lawsuit.
The lawsuit is unique in that it is a mass litigation lawsuit: this is similar to a class action suit, where many cases are handled at once in a single location. With a class action suit, all of the cases are essentially the same, but in a mass litigation suit, the cases are similar but not identical, which means businesses will likely receive varying amounts of compensation depending on their losses.
The first step in the lawsuit will be to decide whether insurance companies are liable. Once this is settled, the cases will go to trial to determine the damages each business owner is owed. It has not yet been determined exactly how compensation will work, but it is likely that there will be an equation used to determine how much you are owed depending on your particular business and policy.
The benefits of a mass litigation case are also similar to those of a class action suit: because so many people are experiencing a similar injustice, there is significant power in the sheer number of plaintiffs involved. If you were to work with an individual lawyer on this type of case, you would be more likely to pay more and also more likely to lose to the insurance company.
With a mass litigation lawsuit, however, business owners can join without taking on the financial risks they would if they hired an individual lawyer. While you would likely have to pay an individual lawyer an expensive hourly rate upfront regardless of whether you win or lose the case, the fees for this mass litigation will be handled on a contingency basis, so you will pay nothing unless we win.
Buttafuoco & Associates has been called upon to spearhead this effort because of our extensive experience in successfully fighting insurers who refuse to pay claims. We have been fighting for our clients’ rights for over 35 years and we will fight for yours too. Although there is no guarantee that we will win, there is also no risk to you to join the case. After you contact us, I will work with you personally to vet your case and ensure that it is thoroughly prepared for mass litigation.
Don’t give up if your claim has been denied. Contact us to take part in this mass litigation.
Call our office today at 800-669-4878 or contact us here.