Businesses throughout Oklahoma sustained financial losses because of the COVID-19 pandemic. Many companies continue to struggle financially because of the effects of the virus business. As the coronavirus continues to change how we conduct business, companies may continue to experience losses.

Some business owners filed insurance claims under their business interruption (BI) insurance policies. However, insurance companies denied many of those claims. A few state and federal lawmakers are trying to help.

Do You Have Business Interruption Insurance Coverage?

The Oklahoma Insurance Department has information about business interruption insurance coverage on its website. A BI policy pays benefits to a business that suffers financial losses because it had to temporarily close. The reason for the suspension of business is key to whether the policy covers the losses.

Bi policies are not stand-alone insurance policies. The coverage attaches to a business insurance policy. The company must purchase and pay for the coverage.

If the BI policy covers the loss, a company may receive payment for losses and general expenses including:

  • Loss of revenues
  • Tax payments
  • Temporary relocation costs
  • Employee wages
  • Fixed operating costs
  • Retraining employees;
  • Rent and mortgage payments
  • Replacement of machinery

The losses included in the policy depend on the coverage. Each BI policy is different. Many of the BI policies have the same language that insurance companies are using to deny COVID-19 business loss claims.

Does Business Interruption Insurance Cover COVID-19 Losses?

You may have BI coverage, but it may not apply to losses caused by the COVID-19 pandemic. Many insurance companies include language that excludes losses related to infectious diseases, such as the coronavirus. Under these policies, coronavirus losses would not be covered.

Your policy may have a clause that provides coverage if the business interruption is caused by an order to shut down by the government. Most of the lawsuits filed so far related to these clauses.

The civil authority clause may help some businesses that operate in areas where the government ordered a mandatory shutdown. However, many of those clauses require that the company sustains a physical loss for the coverage to apply.

The terms and conditions of your BI policy determine whether your COVID-19 business losses may be covered by business interruption insurance. The first step is to carefully read your entire insurance policy. If you have questions, an insurance lawyer can review the policy to interpret the coverage for you.

Insurance Companies Deny Coverage for COVID-19 Business Losses

As with other insurance claims, insurance companies search for reasons to avoid paying claims. In the case of COVID-19 business losses, the insurance industry has made it clear that it does not intend to cover these losses.

Over two dozen federal lawmakers sent a letter to four of the major insurance trade organizations. The letter urged insurance companies to cover COVID-19 business losses under business interruption policies. In a response to lawmakers, the insurance organizations acknowledged the challenges faced by businesses during the pandemic, but flatly refused to cover the losses under BI policies.

Federal and state lawmakers continue to work on ways to resolve the issue. Several pieces of legislation have been introduced, but Congress has not passed any legislation regarding BI coverage for COVID-19 losses at this time.

Courts Are Deciding Business Interruption Lawsuits in Favor of Insurance Companies

There are already several lawsuits making their way through the court system regarding business interruption insurance. Unfortunately, the rulings thus far have not favored the businesses.

A Michigan company argued that its BI policy covered business losses related to the COVID-19 shutdown. The company stated that the civil authority clause of the policy applies since the government restricted business operations. The judge in the case ruled in favor of the insurance company, stating that there had to be something that physically altered the property for the provision to apply.

In a similar case in New York, the judge ruled against a magazine publisher using the same civil authority argument. The judge commented that the virus damages the lungs, but that it does not damage printing presses.

A case is currently pending in Oklahoma state court by the Chickasaw Nation. The Chickasaw Nation claims that its losses from shutting down its casinos are covered by business interruption insurance.

The Choctaw Nation of Oklahoma has also filed a similar case seeking BI coverage for COVID-19 financial losses. The outcomes of those cases are still pending in the Oklahoma courts.

Uncertainty of Business Interruption Insurance Coverage

Lawmakers and courts continue to work on the issues related to COVID-19 and business interruption insurance. Business owners with BI policies may want to consult a bad faith insurance attorney if their insurance company denies a claim.

To learn more, call our law firm at (405) 513-5658 or just visit our contact us page to send us an email and we will get back to you.

Contact the Oklahoma City Personal Injury Lawyers at McGuire Law Firm Today for Free Consultation

For more information, please contact the Oklahoma City personal injury law firm of McGuire Law Firm at our nearest location to schedule a free consultation today.

We serve throughout Oklahoma and its surrounding areas:


McGuire Law Firm – Edmond
200 E 10th Street Plaza
Edmond, OK 73034
United States
(405) 513-5658