Business Interruption Insurance (BII) – Is Your Business Covered?
Most insurance companies wrap business interruption insurance into a policy package to help companies replace a portion of income lost to a natural disaster, fire, flooding, crime, or equipment failure until they can get back up and running. In some policies, government-mandated closures for infrastructure repairs or in the light of civil unrest may be included as well. Business owners can use payouts from a business interruption claim to cover a number of expenses, including:
- Employee salaries and benefits
- Loan payments
- Relocation costs
- Lost profits
In March 2020, as COVID-19 swept through the U.S., the vagueness in business interruption insurance policies regarding pandemic coverage began to emerge. While some insurance companies added viral exemptions to their policies following recent SARS and MERS outbreaks without informing their clients, others stand by their assertion that if no physical loss occurred directly from coronavirus contamination, no claim could be made. A number of insurers are attempting to skirt their responsibilities because their policies do not specifically mention coverage of communicable diseases or pandemics, or they refuse to pay because an act of civil authority was not related to physical damage to the insured’s property or a neighboring property.
Because of the global reach of coronavirus and the number of businesses affected, insurance companies are taking any means necessary to avoid their commitment to their customers. While both individual states and the federal government are considering bills to require carriers to assist small businesses, right now most people are left to fight on their own.