What to Do If Your Business Interruption Insurance Claim Is Denied
Although some parts of Canada are in the process of phased reopenings, many businesses are still struggling amid forced shutdowns and concerns about the transmission of COVID-19. Many business owners have filed business interruption insurance claims to help recover some of their losses. Unfortunately, many of these claims have been denied.
You may be able to file an appeal if your claim is denied. However, given the widespread denial of business interruption insurance claims during the coronavirus pandemic, your best option may be to take legal action against your insurer.
Klein Lawyers has filed a class action lawsuit against Intact Insurance on behalf of business owners throughout Canada for unlawful denial of business interruption insurance claims. We are also currently investigating claim denials by other insurance companies.
If your business interruption insurance claim has been denied, please call (604) 874-7171 today. Your initial consultation is free.
My Claim Was Denied. Now What?
If you receive a denial of claim notice from the insurance company, the first thing you should do is read the notice carefully. The letter will provide the insurer’s rationale for denying your claim. It may also include information on the process for launching an appeal.
At this point you may feel angry and at a total loss as to how to keep your business going. You have already lost money due to government-mandated closures, and now you find the insurance you pay premiums on every month won’t help you. It is important, however, to stay calm.
Do not damage or destroy the notice you get from the insurance company. Instead, file it with your other insurance documents. If you are unsure what to do next, you may want to consider contacting a lawyer for assistance.
How a Lawyer Can Help If Your Business Interruption Insurance Claim Is Denied
Insurance policies and other documents are written in complicated language that many laypeople struggle to understand. Lawyers, however, have specialised training and experience not only with how insurance companies communicate but how they operate.
When you meet with a lawyer, be sure to have both the denial of claim notice and your insurance policy. The lawyer will examine the policy to see what is covered by your business interruption insurance.
Your options may include:
- Appealing the denial of your claim
- Taking legal action against your insurer, whether through:
- An individual lawsuit
- A class action
Multiple class actions have been initiated against insurance companies for their denial of legitimate business interruption insurance claims. You may be entitled to compensation if a settlement is reached in an action against your insurer, but this can take time.
Therefore, it is best to speak to a lawyer about your legal options as soon as possible if your claim has been denied.
What Information Do I Need?
Whether you decide to appeal the denial of your claim or take legal action against your insurer, it is crucial to have documentation of your losses. This may include records such as:
- Profit and loss statements from before and after any closures
- Payroll records
- Rent and utility bills
- Tax returns from before the closure and tax statements during the closure
- Statements for loan payments
- Estimates and payments for repairs, remodeling, and relocation
- Receipts for disinfection and mitigation products and services
You should also keep any notices you received from civil authorities concerning mandated shutdowns, social distancing advisories, etc.
If you appeal a denied business interruption claim, the insurance company may audit your records to ascertain the value of your losses. If you take legal action against the insurer, your damages must be supported by the evidence to be awarded the compensation you deserve.
Do I Have a Claim Against the Insurance Company?
Insurance companies argue that their business interruption policies do not cover losses associated with viral outbreaks. However, if your business interruption insurance policy does not include a virus or pandemic exclusion, this may not be the case.
In the class action we filed against Intact Insurance, our lawyers argue that the denial of a business interruption insurance plan on the grounds that losses associated with COVID-19 are not covered constitutes a breach of the contract between the insurer and the policyholder. We also assert that the insurance company is unjustly enriching itself by accepting payments for insurance premiums yet refusing to compensate the insured for covered losses.
So, if the insurance company claims that your business property and income losses connected to the coronavirus are not covered, this does not mean you are out of options. Multiple insurance companies are facing litigation from policyholders for failure to pay legitimate business interruption claims.
Contact Our Business Interruption Insurance Lawyers Today
If your business is struggling amid the COVID-19 outbreak and your business interruption insurance claim was unjustly denied, it is in your best interest to seek legal assistance as soon as possible. The team at Klein Lawyers understands complex insurance matters, and we can advise you of your options for recovering your losses.
For more information about business interruption insurance claim denials and current class actions, please call (604) 874-7171 today for a free consultation. Klein Lawyers has offices in British Columbia and Ontario, and we represent clients in class actions throughout Canada.