If you have suffered business income losses, due to orders of civil authority by Missouri officials to close all non-essential services to fight the pandemic, these may be recoverable under your insurance policy. Bautista LeRoy LLC is currently fighting insurance companies to pay businesses for losses they suffered during this COVID-19 pandemic. We are here to help you with any losses suffered from your business interruption during these times.


Business Interruption Caused by Coronavirus in Missouri.


Businesses, big and small, are part of the American dream.  That dream for many has been nearly extinguished by the impact on the public of the fear of contracting and spreading the coronavirus. To make matters worse, civil authorities in Kansas City and the surrounding counties have ordered most businesses to shut down.  “Mom and pop” shops – restaurants, bars, retail stores— that do not have much in the way of reserves will either have to figure out a way to pay bills without revenue or permanently shutter their operations.  Even larger companies such as hotel chains will have to terminate employees, eliminate facilities, and cut their overhead to survive.


Most businesses paid and continue to pay premiums for insurance to cover unexpected losses during these times and anticipated some financial help.  Perhaps they did not qualify for debt relief from the government or will require more funds to weather what may be months of an economic shutdown.  Unfortunately, insurance companies are telling businesses that their policies do not cover disruptions from a pandemic virus and are not honoring their insurance contracts.


The subject of the dispute is “business-interruption” coverage, which is included in most business insurance policies.  The language typically mentions coverage of disruptions from catastrophic events such as tornadoes to everyday occurrences like burst pipes.  Some policies also provide civil authority or civil disruption coverage that specifies coverage when the government shuts down business activity as Mayor Quinton Lucas’ Shelter-in-Place Order for Kansas City, Missouri on March 21, 2020.


Recovery for Civil Authority or Civil Disruption Business Losses.


These policies will have language defining a loss due to Civil Authority.  Cincinnati Insurance Company policies, for instance, read, “This insurance is extended to apply to the actual loss of Business Income you sustain when access to your ‘scheduled premises’ is specifically prohibited by order of civil authority as the direct result of a Covered Cause of Loss to property in the immediate area of your ‘scheduled premises.’”  State Farm and Sentry Insurance are believed to have similar language.


On one hand, insurance companies say business-interruption coverage was meant only to cover physical damage to the property of the businesses.  They also point to specific exclusions in certain policies like viruses or specified cause of loss definitions that do not include fungi, mold, or viruses.  Business owners, of course, believe differently.  Some claim fraud, alleging they have been unfairly deprived of the lifeline for which they had paid increased premiums for years.


What should a Disrupted Business Owner do?


Every state has its own insurance laws, which affects how the various policies are written.  Those laws will, just as importantly, determine how each policy is interpreted.  Missouri courts, for instance, construe ambiguities in insurance contracts against the insurance company and found that there is coverage for these claims.


As a consequence, lawsuits over denial of business-interruption coverage are already being filed in Missouri.  The fact that the disruption of revenue has just begun and may continue long into 2020 means that the litigation will not only continue but rise.  Meanwhile, some state legislatures such as New Jersey are proposing bills that would invalidate exclusions for virus-related losses and require insurance companies to pay out on business-interruption claims.


If you are a business owner that has been shut down because the civil authority in Kansas City determining your business was non-essential, give Bautista LeRoy LLC a call at 816-221-0382 or click the link in the right-hand corner to chat with us.


Leave a comment