october 28, 2020

october 22, 2020

October 19, 2020

october 15, 2020

october 12, 2020

october 8, 2020

october 5, 2020

september 22, 2020

september 21, 2020

September 11, 2020

august 4, 2020

july 6, 2020

july 1, 2020

June 29, 2020

June 22, 2020

june 15, 2020

june 10, 2020

june 8, 2020

June 4, 2020

may 29, 2020

may 28, 2020

may 27, 2020

may 15, 2020

may 14, 2020

may 12, 2020

may 8, 2020

may 6, 2020

may 5, 2020

may 4, 2020

may 1, 2020

april 29, 2020

april 24, 2020

April 23, 2020

april 21, 2020

april 17, 2020

april 16, 2020

april 15, 2020

April 14, 2020

APRIL 13, 2020

APRIL 10, 2020

APRIL 9, 2020

april 8, 2020

april 7, 2020

April 3, 2020

april 2, 2020

april 1, 2020

March 31, 2020

march 30, 2020

March 27, 2020

March 26, 2020

march 25, 2020

march 24, 2020

march 23, 2020

MARCH 21, 2020

MARCH 20, 2020

MARCH 19, 2020

MARCH 18, 2020

MARCH 17, 2020

MARCH 16, 2020

MARCH 5, 2020

Hope for Companies Where COVID-19-Related Business Interruption Claims Have Been Denied Without Investigation

ROBERT BERG, BRYAN JOHNSON
OCTOBER 19, 2020


One of the several painful effects of the COVID-19 pandemic is that countless businesses have suffered and even been forced to shutter. This is the case despite the fact that many of them have insurance policies that not only protect from damage to property, but also typically cover lost profits from business interruption. Nevertheless, companies large and small are not reaping the benefits of their insurance policies because carriers are denying business interruption claims without proper investigation.

Of note, the vast majority of policies that provide coverage for business interruption requires physical injury to the insured’s structure. Moreover, many of them include “virus” or “microbial’ exclusions that could form the basis of a coverage denial. Still, with only a nod to such limiting policy language, insurers are denying business interruption claims without the diligence (read: investigation) required by law.

More and more, those on the receiving end of coverage denials are fighting back. Recently in California, a suit was filed by a preschool called the Baldwin Academy after its insurance company denied its business interruption claim, allegedly without performing any investigation. The complaint for breach of contract and breach of the implied covenant of good faith and fair dealing alleges that the insurer asserted it was not obligated to investigate further and refused to do so, even though the policy in question included a communicable disease endorsement.

It would appear that the insurance company’s purported assertion that it was not required to thoroughly investigate is tenuous, at best. In California, as in most states, carriers are obligated to investigate claims prior to rendering decisions on coverage. In fact, California Insurance Commissioner Ricardo Lara has sent out a mandate to insurers doing business in the state making clear that all COVID-19 claims must be fully investigated prior to the rendering of a coverage decision. To put a fine point on it, Commissioner Lara’s mandate states that all insurers must pursue a “thorough, fair, and objective investigation.”

All that being said, if your company is having difficulty with a business interruption claim arising from COVID-19, or any other pandemic-related matter, the attorneys in Michelman & Robinson’s COVID-19 Practice Group can certainly help.


We are working diligently to keep our clients up to date on coronavirus-related developments. Nevertheless, these developments are changing daily and, in some cases even hourly, so it is important that you make sure you are dealing with the most current information. That being said, this alert is not offered, and should not be relied on, as legal advice. You should consult an attorney for guidance and counsel regarding any specific concern or situation.