Opinions differ on COVID insurance claims for small businesses

Small business owners across the country who have been devastated by loss of revenue and/or employee work productivity due to COVID-19 are now left wondering whether their insurance policy covers their losses. Locally, some in the insurance business say no, while other attorneys say, “definitely maybe.”

At-Large Group 4 City Councilmember Matt Carlucci, a State Farm insurance agent, says it is highly unlikely virus losses would be covered, although it would be nice if they were. 

“Loss of income would never apply to a Coronavirus pandemic or anything that has to do with health, not that I’ve experienced in my 42 years in the property and casualty insurance business,” he said. “It would be much more fun to say that it is covered, but it’s not, which is sometimes why people buy disability insurance, Aflac (supplemental insurance), and in the awful event of a life event, they might buy business life insurance. In the event of COVID interrupting a business, and businesses suffering a loss of income because of the Coronavirus, I don’t know of any property and casualty policy covering it.” Carlucci said, adding in his experience, policies pay loss of income for physical loss, such as if the business burned down or was damaged by a tornado or by some other means.

 But Bradley Bodiford disagrees. An attorney with the Jacksonville firm Terrell Hogan, Bodiford and other local attorneys dispute Carlucci’s view, and Bodiford said that unless a business policy has a virus exclusion – which the insurance companies started putting in policies after several pandemics in the last century – there was room to potentially be reimbursed. He said that he and other local attorneys have been reviewing policies and about a third of the policies they reviewed did not have an exclusion. The collective number they reviewed by the last week of May was about 20. 

“Even if there isn’t a virus exclusion, it doesn’t mean there’s a slam dunk, but we think potentially there is a path forward for you, and potentially a large amount of money, and the sustainability of your business,” he said. The effect of the virus can be likened to other cases that the courts have ruled on, case law that sets a precedent – and could be designated as a physical loss, depending on how local, appellate, and possibly the Florida Supreme Court see it, he explained. In his view, the virus makes physical businesses uninhabitable, leading to a physical loss, and in Washington State and across the country, several businesses have filed lawsuits on the same premise.   

“But it’s up to the judges to make this jump,” Bodiford said. “We will probably start seeing opinions across the country in three to six months. I imagine one judge will see it one way, and one will see it the other way. If all the mid-level appellate (appeals) courts agree, it wouldn’t go up to the State Supreme Court. There are a lot of ifs,” he said.

In the meantime, there is one concrete step business owners can take if they’re seeking reimbursement, he said: Have an attorney review the policy. 

By Jennifer Edwards
Resident Community News

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