Small businesses have been hit hard by the coronavirus. And while America slowly reopens, countless are still trying to recover the losses from state closures. Many thought they could rely on business interruption coverage to pay their employees and keep the lights on. However, some insurance providers are denying businesses the protection they deserve, resulting in a wave of legal disputes.

Many thought their insurance coverage would hold them over

Despite the effects of the pandemic and orders from governors across the country, many owners were nervous, but slightly optimistic. That’s because many thought their coverage would provide a temporary financial band-aid, allowing them to pay the bills and compensate workers. However, that wasn’t the case for everyone, as countless insurance companies denied their claims.

As a result, many small businesses across the country have joined federal lawsuits in an attempt to get the coverage they need. Some are even requesting extra damages from their insurance companies for breach of contract and acting in bad faith.

Questions over whether pandemics are insurable

In many cases, insurance companies have tried to argue that pandemics are simply uninsurable.  They claim a virus does not cause physical damage like fires, windstorms or gas leaks do. And since many government-imposed shutdowns didn’t target specific businesses, they don’t count as “civil disturbances” that can usually activate policy coverage.

However, others say the physical damage argument doesn’t hold up. That’s because some believe microscopic viruses that can travel from person to person count as physical damage, hence why allowing customers inside could put them at risk.

Small businesses deserve the coverage they pay for

If businesses have learned anything during the pandemic, it’s that many insurance companies will do anything they can to save money. Even if it means the entities they serve have to close their doors. If owners find themselves in this situation, they may benefit from the assistance of a trusted legal partner.