Businesses all across Ontario have been impacted by COVID-19 to varying degrees with many business owners rightfully concerned about the future of their livelihoods. While we’ve all been forced to make both personal and professional adjustments to cope with the uncertainties and uneasiness brought on by this unprecedented health crisis, non-essential small businesses are arguably taking the hardest hit. These are well-known, established, and beloved institutions that are longstanding fixtures within their communities. To see them being financially devastated by COVID-19 is equally heartbreaking and tragic.
No doubt, business interruption is never easy, but it’s especially difficult during this unpredictable time when many business owners are having a hard time paying their rent. The government subsidy and 75% rent reduction are certainly helpful, but for a lot of small businesses, it may be insufficient and too little too late.
Although it may seem like there’s no end in sight, there is actually a light at the end of the tunnel. Business interruption insurance could be the solution you need to help your business overcome this difficult period. But how does it work? How can you apply? And is it guaranteed to come through for you?
Understandably, as a business owner, you probably have a lot of pressing questions regarding this form of insurance and how it works. As one of the leading business interruption insurance law firms in Toronto and the GTA, Mirian Law Firm is here to help you.
Physical Loss or Damage Coverage
Depending on the type of policy you have – whether it’s comprehensive or partial coverage – losses incurred due to business interruption are typically covered as long as they’re a direct result of physical loss or damage.
In light of the COVID-19 pandemic, however, many business owners are justifiably wondering whether a local virus or bacteria transmission also qualify them for this type of coverage. There seems to be a great deal of confusion regarding policy business insurance policy coverage in this particular circumstance.
Many insurance providers are trying to circumvent this financial responsibility by claiming that pandemic-related interruptions – i.e. reduced income, employee layoffs, and temporary or permanent closures are excluded from business interruption insurance coverage.
It could be argued, however, that if a place of business becomes contaminated by COVID-19 or any other infectious virus and is forced to shut down, as a result, that could constitute a physical loss or form of damage to the property itself. From a legislative perspective, the jury is still out on this one.
It’s worthwhile to continuously review your current policy, make necessary updates, and keep open communication with your insurance provider regarding your business’s changing insurance requirements or in case you need to file a business interruption claim due to COVID-19.
Pay special attention to the language used throughout your policy as some insurance providers may explicitly state whether or not they will cover specific disease outbreaks as a form of physical loss or damage. If you’re uncertain whether you’re entitled to some form of financial relief under your current policy, then you should have a business interruption insurance lawyer at Mirian Law Firm review your policy for you.
Legal Terminology Used in Business Insurance Policies
Oftentimes, insurance policies are littered with legal jargon that many laypeople have a hard time following. In instances where the policy terms are ambiguous, most courts tend to rule in favour of the policyholder instead of the insurance provider. With that in mind, under the advisement of an experienced insurance lawyer, it may be worthwhile to go ahead and file a business interruption claim if your business has been deemed non-essential during the current coronavirus pandemic.
The Insurance Bureau of Canada has provided a public access glossary of commonly used insurance terms that you can reference any time you need clarification on a specific term or phrase within your policy.
Applicability of Civil Authority Claims
In the event of a natural disaster or pandemic such as the novel coronavirus, government bodies of all levels (federal, provincial, and municipal) have the authority to prohibit access to or evacuate certain high-risk regions. Under civil authority laws, this can including the mandatory shutdown or reduced service access of both non-essential and essential businesses.
Business insurance or business interruption insurance policies that include a civil authority clause indicate that those businesses may be entitled to government subsidies or reimbursements in the event that they suffer financial loss or damages due to unprecedented operational reductions or closures in light of a catastrophic event.
Countless business owners have been forced to shut down their operations as a direct result of the coronavirus pandemic. And those that have been allowed to remain open have had to make significant changes or reductions to their operations. These adjustments include:
- Reducing business hours
- Minimizing staff capacities
- Allowing some employees to work from home
- Administering thorough cleaning and disinfectant measures
- Streamlining product delivery methods
- Refocusing business models and facilities to produce necessary products such as hand sanitizer, medical-grade personal protection equipment, etc.
The list goes on and varies depending on the type of business in question.
When it comes to civil authority claim applicability, the real question isn’t whether or not your business is entitled to this form of financial support (as long as your policy contains such a clause, you are); it’s how much compensation you’re entitled to receive under specific circumstances.
Mitigating factors in that regard include how badly your business is impacted due to COVID-19 and how long the pandemic actually lasts.
Get Help from an Experienced Business Interruption Insurance Lawyer
Has your business faced severe financial setbacks due to coronavirus-related closures? Are you having a hard time making heads or tails out of your business or business interruption insurance policy? During these extremely trying times, you need the help of a distinguished insurance lawyer who can not only help you better understand your policy but also how to get the most out of it.
Mirian Law Firm has a team of experienced and dedicated business interruption insurance lawyers who are eager to work on your case. Contact us today to schedule a virtual consultation!