As readers of this blog know, all business owners should have insurance. Most owners know about commercial liability and property insurance, but business owners should also have business interruption insurance. During these trying times, business interruption insurance has never been more important, including for COVID-related business losses.
What does BII do?
BII gives San Francisco, California, businesses owners insurance for financial losses that result from operation stoppages. This helps businesses remain in business when they have to temporarily close. BII replaces your business income to cover your operational and overhead expenses, which is why almost half of all businesses have BII.
Stoppages can be for a variety of reasons, but one that is most prescient right now is operation stoppages as a result of COVID. However, depending on the terms of the policy, COVID stoppages may not be covered. Named perils often include fire damage, wind damage, falling object damage and theft.
What is not covered
While damages from civil unrest, riots and vandalism are normally covered, many BIIs specifically exclude these and other events. Commonly, Acts of God are excluded, like flooding, mudslides and earthquakes. You can purchase coverage for this.
What about the pandemic?
It is undisputed that the pandemic has wreaked havoc on all San Francisco, California, businesses. According to a Yelp report from 2020, more than 160,000 businesses closed because of the pandemic, and of those, the majority will never reopen. So, of course, these businesses looked to their BII for protection to whether the storm. Unfortunately, unless your policy specifically lists illnesses, pandemics or some other contagion, COVID is likely excluded.
What should businesses do?
Check your BII policy and call your insurance agent. Often, if this specific language is not included, there is some ambiguous language where it can be argued that the pandemic losses should be covered. This is where you will need to get your San Francisco, California, lawyer involved because your BII will use whatever means they can to deny coverage, just like any other insurance company.