Lawsuits are being filed across the country, including in Texas, over insurance companies denying claims for business interruption arising from the coronavirus pandemic. Business interruption insurance typically covers the loss of income that a business suffers due to a disaster.
Recently, a Humble, Texas business filed one of the first COVID-19 related lawsuits in the Houston area. The lawsuit is filed in Harris County District Court. The business’s insurance company denied its claim and informed their insured that the policy did not cover unexpected business losses due to disruptions from a pandemic. The business filed a lawsuit against its insurance company for breach of contract, unfair settlement practices, violation of the Prompt Pay Act, and a breach of the duty of good faith and fair dealing related to the alleged wrongful denial of the claim.
Companies of all sizes are trying to figure out how to pay everyday expenses with no revenue coming in for the coming weeks and possibly months. Even recent legislation may not be enough to help companies. Several insurance companies have taken the position that business-interruption policies specifically exclude pandemics and are only intended for physical damage to a business. Many predict there will be widespread litigation brought by policy holders against insurance companies for the denial of business interruption claims.
If an insurance company has denied your claim for business interruption related to COVID-19, contact an attorney at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner by calling 713-231-9360 or toll free at 1‑800-594-4884.