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California Asks Insurers to Investigate COVID-19 Business Interruption Claims

There is no aspect of daily life that the COVID-19 pandemic has left untouched – and that includes the daily operations of companies in a wide range of industries and areas. More than ever, small business owners are faced with a precarious financial situation, as California’s “stay at home” order continues to be extended.

As California business owners file for interruption coverage under their property and casualty loss insurance policies, however, the insurance companies have shown an alarming disregard for the financial security of these businesses. With mounting evidence that insurers are denying COVID-19 business interruption claims – and even encouraging policyholders not to file – the California Department of Insurance (CDI) has issued a notice demanding that insurers comply with their agreements.

Holding Insurers Accountable to Policyholders

Issued on Tuesday, April 14th, the CDI notice came directly from Insurance Commissioner Ricardo Lara, and it urges insurance companies to comply with all their contractual obligations regarding business interruption insurance claims. In an article for the Los Angeles Daily News, Lara stated that “I want to be absolutely clear that insurance companies need to fairly investigate all business interruption claims as they would during any disaster.”

According to this notice, insurers have to provide policyholders with all the necessary materials and resources to complete out their business interruption claim. Then, the insurer must take immediate action to perform an in-depth investigation, issuing either an approval or denial within 40 days once the insurer has received the claim.

Am I Eligible for COVID-19 Business Interruption Coverage?

If you have business interruption coverage and have been negatively impacted by COVID-19, you may be eligible for compensation to cover any lost profits, employee wages, rent, and other operational expenses for your business. Although some business insurance policies have language that specifically excludes viruses and bacteria, you may still be eligible for compensation due to the government-mandated shutdowns of non-essential businesses. Your policy may also include language about “acts of God” and “force majeure” events that could be applied to the coronavirus outbreak.

Of course, it’s essential to contact an experienced insurance law attorney who can carefully read your policy and help you review your legal options. At Greene Broillet & Wheeler, LLP, we offer free consultations for business owners who have been impacted by the coronavirus and denied claims for their losses. As your committed advocates, we’ll stand up to the insurance companies and hold them accountable if your denial was unfounded.

Contact us at (866) 634-4525 today or submit our online form to get started with a no-cost consultation on your business interruption claim denial.