Most businesses would like a 2020 do-over. COVID-19 brought an abrupt halt to economic activity. Government orders to shelter-in-place and close non-essential businesses ravaged companies large and small. Numerous companies that weathered COVID and had just begun reopening then found themselves facing challenges related to the social unrest our country is experiencing as a result of longstanding racial injustices. Now a third threat looms: a hurricane season that is expected to see a number of severe storms.
Fortunately, many businesses carry insurance to protect against income losses. This so-called business interruption insurance is designed to protect a policyholder “against losses arising from [their] inability to continue the normal operation and functions of [their] business, industry, or other commercial establishment,” according to a 2013 case, Northrop Grumman Corp. v. Factory Mut. Ins. Co.
Unfortunately, insurers are challenging COVID-19-related business income claims, and industry publications suggest there might be related challenges ahead for policyholders looking to collect on looting or hurricane-related business income claims.
Source: CFO Dive