The Latest on Catastrophic Business Losses and Business Insurance Claims by Dan Hughes, CPA/CFE, CGMA, CVA

Posted on April 15, 2020 by Daniel Hughes

Relief may be coming to the millions of business owners who now realize that the insurance policies they have been paying into for many years will not reimburse them for any of the catastrophic business-interruption losses they sustained due to the COVID-19 pandemic.

Already, several states have introduced bills requiring insurers to retroactively cover and pay business interruption (BI) insurance claims for businesses closed or restricted because of social distancing and shutdowns to combat the COVID-19 pandemic. On the federal level, lawmakers have introduced the Pandemic Risk Insurance Act, which would work as a federal backstop for pandemic-related losses incurred by insurance industry losses. Similar to the Terrorism Risk Insurance Act, this program would create a federal program of shared public and private compensation for business interruption losses resulting from pandemics or outbreaks of communicable disease.

At the same time, lawyers across the country have filed commercial lawsuits, including a class action suit requesting declaratory judgements against insurers for breach of contract or anticipatory breach of contract based on business interruption and/or civil authority clauses contained in many business insurance policies.

The fundamental questions with respect to first-party property-insurance coverage for COVID-19-related losses are 1) whether the presence or potential presence of the virus caused physical loss or damage to property, including the loss of use and occupancy to that property, and 2) and whether such physical loss or damage caused a loss of business income.

The Forensic and Advisory Services professionals with Berkowitz Pollack Brant Advisors + CPAs are continuing to monitor these developments and work with legal counsel to notify clients’ insurance carriers of potential claims and to quantify economic losses and grounds for legal action.

If you have questions about business-interruption insurance and helping clients pursue claims for recovery of coronavirus-related economy injuries, please read our article or contact our team at (305) 379-7000 or