Business losses due to COVID-19 may be covered under a business’s insurance policy, even if the insurer denies the claim.

We are in the process of reviewing hundreds of insurance policies on behalf of businesses – large and small. We think many policies cover coronavirus-related losses, even when the insurance company says otherwise.

Insurance companies have every incentive to make it hard for you to recover your business losses. But we want to help. Contact us and we can review your policy for free.

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Business Interruption Insurance Lawsuits

After paying thousands of dollars in premiums, many businesses are being told by their insurers that their business-interruption insurance, which was supposed to replace lost business income during a disaster, does not cover COVID-related losses.

Insurance companies often refuse to pay — whether justified or not. Many times these companies will rely on vague policy exclusions to try to avoid their obligations. Even if your claim is denied, you still may be entitled to benefits.

Hartford Insurance Class Action Lawsuit

On April 27, 2020 we filed a class action lawsuit against insurance providers The Hartford and Sentinel for denying coverage to Washington, D.C. restaurants suffering losses from coronavirus stay-at-home orders.

Read more here: The Hartford Class Action Lawsuit Complaint

Other Business Interruption Insurance Lawsuits

When insurance companies deny their claims, small business owners often file lawsuits to force their insurance company to pay. For example, two restaurants in Napa Valley recently sued their insurance carrier, Hartford, for failing to pay claims under the restaurants’ business interruption insurance. According to the complaint, the two restaurants’ insurance plans specifically covered business losses due to an order by civil authority that prevents access to the building, such as the shelter-in-place orders adopted in Napa and various other parts of the country.

A Louisiana restaurant, Oceana Grill, also reportedly sued its insurance carrier, Lloyd’s of London, to proactively require the carrier to provide coverage under an “all risk” insurance policy for losses stemming from government-ordered closures due to COVID-19. According to The National Law Review,

In its’ Complaint, Oceana argued that because their policy did not exclude losses that arise as a result of a virus or global pandemic, the restaurant is entitled to coverage.

In Illinois, six bar and restaurant groups filed a suit in federal court against their insurance provider, Society Insurance, for allegedly wrongfully denying payouts related to COVID-19 losses because the businesses supposedly did not suffer property damage or loss. An owner of one of the Chicago restaurant groups was quoted by Eater Chicago as saying,

We’ve been paying our policies every month… For them to come out and find a way not to pay, it’s outrageous.

The few U.S.-based lawsuits are just the tip of the iceberg. Insurance companies are refusing to pay business interruption claims all over the world. Learn more about how businesses are dealing with COVID-19 losses in our Business Interruption Insurance Article.

Does my business insurance cover losses due to coronavirus?

That is a complicated question. According to Locke Lord LLP, a law firm that defends insurance companies, a court is more likely to find that some  policies rather than others cover coronavirus because some policies contain certain policy exclusions, while others do not. For example, if a policy covers building closures due to an order by a “civil authority,” this may be a better fit for claiming coverage if you were forced to close your property due to a shelter-in-place order.

However, some policies also contain a physical loss requirement, which may be more difficult to navigate. With these types of policies, you may have to prove that you suffered a physical loss due to COVID-19.

The bottom line is that every policy is different and should be evaluated as such. If you believe you may have may be entitled to covered due to your recent business losses, get a free consultation from an insurance lawyer. You may have a claim.

What do officials have to say about Business Interruption Insurance?

Many officials are now urging insurance companies to take business interruption claims more seriously. According to the Insurance Journal, California Insurance Commissioner Ricardo Lara issued a notice requiring insurance companies to fairly investigate all business interruption claims resulting from COVID-19 losses. The Journal quotes the commissioner in saying,

I want to be absolutely clear that insurance companies need to fairly investigate all business interruption claims as they would during any disaster… Policyholders deserve all the services, coverage, and benefits they are due under their policy.

The Insurance Journal also reports that President Trump made a statement regarding Business Interruption Insurance. According to the article, the President claimed that, unless the insurance policy excludes pandemics, the insurer should pay. The Journal further quotes the President in saying,

You have people that have never asked for business-interruption insurance and they have been paying a lot of money for a lot of years for the privilege of having it and then when they finally need it, the insurance company says ‘We’re not going to give it’ … We can’t let that happen.

Losses Typically Covered by Business Interruption Insurance

When small businesses purchase business interruption insurance, it is usually intended to cover the risk of a wide variety of losses:

  • Projected unearned profits.
  • Operating expenses and other fixed costs, including replacement machinery.
  • Temporary business re-location costs.
  • Employee wages, including benefits.
  • Unforeseen extra expenses, beyond the fixed costs, such as re-training costs.
  • Civil authority order due to government-mandated closure of business premises that directly cause financial loss.
  • Business taxes.
  • Loan payments.

Businesses that expected they were taking the responsible step by securing business interruption coverage are now finding themselves unfairly burdened with damages and costs resulting from insurance company’s failure to cover these losses resulting from COVID-19.

California Business Interruption Insurance Claims Process

According to the Business Interruption Insurance Notice from Insurance Commissioner Ricardo Lara, there are a few primary rules and procedures that insurers must follow when a business wants to claim on its business interruption insurance.

  1. Policyholders send a Notice of Claim: The Business Interruption Insurance Notice states that the obligations outlined in the California Fair Claims Settlement Practices Regulations require that insurers accept any communication from the policyholder or its representative as a notice of claim if the communication indicates that the policyholder desires to make a claim, and the communication reasonably suggests that a response is expected.
  2. Insurers acknowledge notice: According to Commissioner Lara, aside from certain exceptions, insurers are required to acknowledge a notice of claim immediately, but within no more than 15 calendar days of receiving the notice.
  3. Insurers provide next steps: As stated in the Commissioner’s Notice, the insurer must provide the policyholder with the necessary forms, instructions, and assistance, and specific the information needed in connection with the proof of claim.
  4. Insurer conducts fair investigation: According to the Commissioner, the insurer is required to “conduct and diligently pursue a thorough, fair, and objective investigation of the reported claim” before decided whether or not to accept or deny the claim.
  5. Insurer accepts or denies: The Notice states that the insurer must accept or deny the claim within 40 days after the receipt of the proof of claim. If the claim is denied, the insurer must provide, in writing, a list of all the legal and factual basis for the denial. According to the Commisioner,

Where the denial of a first party claim is based on a specific statute, applicable law or policy provision, condition, or exclusion, the written denial must include reference to and provide an explanation of the application of the statute, applicable law, or policy provision, condition, or exclusion to the claim.

In addition to these outlined steps, the Commissioner’s Notice explains that no insurer, agent, or representative may dissuade policyholders from filing a notice of claim, or refuse to open an investigation on claims under Business Interruption Insurance. If you believe your insurer did not conduct a fair investigation into your claim stemming from COVID-19, you may have legal recourse.

What to do if your business interruption insurance claim is denied

If your business interruption claim is denied, there are a few immediate steps you should take:

  1. Save your documents: The more information you have, the better. The insurer should provide you an explanation of why it is denying your claim.
  2. Talk to an attorney: Learn about your legal rights and recourse immediately. Act promptly to protect your rights.
  3. Review the wording of your policy: Every policy is different and should be treated as such. Review your policy to understand your specific coverage and what you are entitled to.

Our lawyers are here to help. Get a free consultation today to learn more.


Insurance Coverage Denied Due to COVID-19?

Get a free and confidential consultation. Find our if you are entitled to coverage.

Business Interruption Insurance Examples

Example: COVID-19 Business Losses

Business interruption insurance is supposed to cover lost business income when a business must suspend operations. Due to the global coronavirus pandemic, many small businesses have had to shut down. If one of these businesses paid for business interruption insurance, they can file a claim for their lost business income. The insurance provider has every incentive to deny the claim. Insurance executives have claimed that they will go bankrupt if they need to pay for COVID-19 losses. But businesses with denied claims can seek legal representation and file a lawsuit to force the insurer to pay. In our legal system, judges get to decide what is covered under an insurance policy; the insurance company does not get the final say.

Unfortunately, many insurance companies won’t even consider approving a claim until a policyholder seeks legal representation or files a lawsuit. Insurance companies may want you to think the issue is cut and dried, but the truth is, the legal landscape for this type of coverage is evolving right now.

Business interruption insurance for COVID-19

Depending on the specific wording of your policy, there are several different ways you might be covered for pandemic-related losses, even if viruses aren’t specifically mentioned and even if your policy requires proof of a physical loss.

For example, some courts have found that loss of the ability to use your property can count as physical loss. Also, some courts have found that in some policies, the clause for covering losses from government-mandated closures (e.g. from civil authority orders) does not require physical damage to the property.

The bottom line is, each specific policy and situation is different. If you want to do all you can to get coverage, it’s worth having an attorney take a closer look.

Business Interruption Insurance Exclusions

Some policies have wording that excludes loss from certain reasons (sometimes referred to as “perils.”) For example, some policies say they don’t cover losses from:

  • civil authority;
  • viruses, bacteria and fungi; or
  • pollutants (which some courts have found to include viruses).

However, even if your policy contains one or more of these exclusions, you may still be covered for your losses from COVID-19. In insurance law, there’s a principle called the reasonable expectations doctrine. This principle says that it’s not just the text of the contract that matters, but also the reasonable expectations of the policy holder. So if there is some ambiguity in the policy, some courts use this principle to rule in favor of more coverage rather than less.

Business Interruption - Civil Authority Closures

Some policies cover closures due to civil authority orders. Many places in the U.S. are under a shelter-in-place order due to the COVID-19 pandemic, and there’s a strong argument that this counts as a closure due to civil authority. So even if your policy excludes virus coverage, your coronavirus losses might still be recoverable because your loss is arguably due to a government order closing all non-essential businesses, rather than due to the virus itself.

Does business interruption insurance cover payroll/wages?

Generally speaking, yes. Business interruption insurance is intended to help replace lost income in the event of a disaster. Most of these policies cover different kinds of operating expenses, including payroll and wages.

A new federal law, the CARES Act, also created a loan program called PPP, the Paycheck Protection Program. Loans from PPP can be fully forgiven if certain conditions are met, including if at least 75% of the funds are used to cover employee payroll.

Our Attorneys

Daniel L. Rottinghaus

Daniel is a Principal at Berding | Weil. As a litigation partner, he represents commercial and residential real estate clients in construction defect and complex litigation. Recently, he resolved a trilogy of large apartment cases for a single client collecting over $120 million, and, in total, he has collected for his clients more than one-half billion dollars.

Howard J. Silldorf

Howard is a Partner at Berding | Weil. Howard has recovered more than $200 million for his clients in over 100 cases throughout his successful career. His practice includes Construction Defect Litigation, Community Association Law, Environmental and Land Use, as well as Real Property and Title Insurance Litigation.

Theresa M. Filicia

Theresa is a Partner at Berding | Weil. Her practice includes Construction Defect Litigation, Community Association Law, Franchise Law, as well as business and employment litigation. With her diverse background, she has been able to effectively resolve complex legal matters and negotiate multi-million dollar settlements.

Eric Gibbs

A founding partner at Gibbs Law Group, Eric has negotiated groundbreaking settlements that resulted in meaningful reforms to unlawful business practices. He was recently recognized as California Lawyer Attorney of the Year and was named to the Top Plaintiff Lawyers in California for 2019.

Andre Mura

Andre represents plaintiffs in high-stakes complex litigation and appeals in state and federal courts throughout the country. He has authored briefs filed in the U.S. Supreme Court and received the California Lawyer Attorney of the Year Award in 2019.

Amy Zeman

Amy Zeman represents clients in a wide variety of complex litigation, with experience working closely with class representatives and consumer contacts. She uses her prior career experience as an accounting/ compliance manager in the financial services sector to identify and investigate fraud claims.

Don Lesser

As Managing Partner of The Lesser Law Group, Don has represented hundreds of policyholders, agents and brokers and insurers for over 35 years concerning a wide range of insurance products and coverage issues, including claims disputes. He has obtained over $50 million in insurance coverage for his clients and brings an uncommon depth and breadth of experience in insurance law.

Andrew Friedman

Andrew is a Partner at Cohen Milstein and the Co-Chair of the firm’s award-winning Consumer Protection practice group. Mr. Friedman is a nationally recognized leader in the area of complex, multi-state lawsuits against major insurers, credit card companies, and other manufacturers and service providers.

Geoffrey Graber

Geoffrey leads Cohen Milstein’s Business Interruption Insurance team. As a Partner and a member of the Consumer Protection practice group, he specializes in complex litigation involving false advertising, fraud, and other forms of unfair business practices at the hands of insurance companies, banks, health care companies, and others.

Victoria Nugent

Victoria is a Partner at Cohen Milstein and Co-Chair of the firm’s Public Client practice. She represents clients in civil law enforcement investigations and litigation involving consumer protection, fraud, and other areas of enforcement.


Eric A. Kafka

Eric is a member of Cohen Milstein’s Consumer Protection practice. He also serves on Public Justice’s Class Action Preservation Committee.


Karina G. Puttieva

Karina is a member of Cohen Milstein’s Consumer Protection practice and focuses on litigating class actions on behalf of consumers who have been harmed by large corporations.

We have assembled a coalition of three prominent law firms – Berding | Weil LLP, Gibbs Law Group, and Cohen Milstein Sellers & Toll – with expertise in successfully litigating insurance fraud claims and other complex litigation. Spanning from the east to west coast, our firms have earned numerous awards for our innovative strategies and relentless efforts to advance and protect plaintiffs’ rights in complex cases, class actions and individual litigation.

Our clients benefit from our size and resources. Our attorneys have litigated against some of the largest corporations in the world, and we have recovered billions of dollars on our clients’ behalf. Together, our team is committed to going above and beyond for our clients as we strive to protect their rights.

Berding | Weil LLP

Berding | Weil is the largest and most experienced common interest development and construction defect law firm in California. We have recovered over $1.5 billion for consumers. We provide superior, client-focused legal services and solutions throughout California and beyond. Our firm and attorneys have received numerous awards, including:

  • Golden Advocate Benchmark Award for Fierce Litigation Tactics and Surpassing Expectations (2020)
  • Martindale-Hubble, “Preeminent” – the highest rating (1995-2020)
  • Expertise, “Best Real Estate Lawyers In San Francisco” (2016)
  • “Super Lawyers” recognition for many of our attorneys

Gibbs Law Group

Gibbs Law Group is a California-based law firm committed to protecting the rights of clients nationwide who have been harmed by corporate misconduct. We represent small businesses, individuals, whistleblowers, and employees across the U.S. against the world’s largest corporations. Our award-winning lawyers have achieved landmark recoveries and over a billion dollars for our clients in high-stakes complex lawsuits and individual cases involving consumer protection, data breach, digital privacy, and federal and California employment lawsuits. Our attorneys have received numerous honors for their work, including:

  • Daily Journal, “Top Boutique Law Firms in California” (2019)
  • Law360, “Titans of the Plaintiffs Bar- Eric Gibbs” (2019)
  • Law360, “Class Action Practice Group of the Year” (2020)
  • Daily Journal, Two “California Lawyer Attorney of the Year (CLAY) Awards” (2019)
  • Daily Journal, “Top Plaintiff Lawyers in California- Eric Gibbs” (2019, 2016)
  • Best Lawyers in America (2012-2019)

Cohen Milstein

Cohen Milstein’s award-winning Consumer Protection practice is at the forefront of representing individuals, retailers, restaurants, and other small businesses in insurance fraud and coverage litigation, having litigated individual and class action lawsuits against many of the leading health, life, and property and casualty insurance companies before state and federal courts across the United States.

We have received numerous accolades for our work in consumer law:

  • Law360, “Consumer Protection Group of the Year: Cohen Milstein” (2019)
  • Law360, “Practice Group of the Year – Consumer Protection” (2018)
  • The National Law Journal, “Winner – Elite Trial Lawyers – Consumer” (2018)
  • Law360, “Practice Group of the Year – Class Action” (2017)