Alabama Business Owners May Struggle to Get Their COVID-19 Business Losses Covered by Their Insurers

Apr 9, 2020 4:20 PM ET

Here’s why.

Many businesses in Alabama, both large and small, have been hit hard by the COVID-19 virus leaving many owners wondering whether they are going to ever be able to recover from the crisis. While some businesses have been shut down completely, others have still been given the green light to remain open although traffic has slowed significantly. Between businesses having to close their doors and citizens holding on tightly to whatever money they had prior to being let go from work or placed on temporary leave, many U.S. businesses aren’t sure what to do to sustain and overcome the COVID-19 crisis.

While some have shifted gears and are solely operating online to help generate some revenue, others are turning to their insurers with the hopes that if they file a business interruption insurance claim, they will be able to recover something that will go toward keeping their business alive. Unfortunately, there are many business owners whose claims are not being approved but instead, denied.

You see, business interruption insurance is meant to protect a business in the event of a natural disaster, fire, or even a windstorm. For instance, if you had to vacate your premises because your business was struck by a major storm or it caught on fire, your business interruption insurance would compensate you for “the revenue you would have earned, based on your financial records, had the disaster not occurred” [Source: Insurance Information Institute (III)]. A business owner carrying business interruption insurance would also receive money to make up for operating expenses (i.e. electricity), that are still owed despite the fact that your business activities have been temporarily placed on hold.

Although many business owners in Alabama who have been impacted by the COVID-19 virus are assuming that they will be able to file a business interruption insurance claim and collect a check for their losses, many might have a hard time getting their claim paid. The fact is, insurers are denying claims simply because business interruption insurance claims typically require physical damage to the property.


Insurers are Being Challenged in Court

As a result of the numerous denial notices that were sent out after business interruption insurance claims were filed, business owners are stepping up and challenging these decisions in court. KOMO News recently reported that a restaurant business owner in Louisiana filed a lawsuit claiming the virus infected their establishment, “adhered to the fixtures of the restaurant, caused physical damage, and therefore should be covered.”

Now, if your business interruption insurance claim was denied and you operate a business in Alabama, is here to connect you with the best Alabama insurance claim denial lawyers who are going to help you challenge your insurer’s decision.

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