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YOUR LEGAL RIGHTS | Should I pursue my business interruption claim?

The cavalier denial of thousands of claims has spawned a flurry of lawsuits in state and federal courts. Although the wheels of justice grind slowly due to the virus, pro-policyholder decisions handed down by courts in North Carolina and Florida provide a glimmer of hope
Attorney David Betras

During the early stages of the COVID-19 outbreak I excoriated insurers for routinely denying business interruption insurance claims filed by companies that had been paying premiums for years — often decades. 

As we approach the one-year anniversary of the outbreak, I thought I would revisit the issue and take a look at what else the insurance giants have been up to as the nation struggles to emerge from the plague. 

I am sure you will not be surprised to learn that advertising slogans notwithstanding, the industry has not been on our side.

On the business interruption front, the cavalier denial of tens of thousands of claims by the world’s largest insurers has spawned a flurry of lawsuits in state and federal courts. Although the wheels of justice grind slowly due to the virus, pro-policyholder decisions handed down by courts in North Carolina and Florida provide a glimmer of hope that companies devastated by the pandemic will eventually receive the compensation they need and deserve.

While the North Carolina and Florida outcomes are significant, the most important rulings may have just emerged from the Federal District Court for the Northern District of Ohio where judges reached diametrically different conclusions after reviewing nearly identical facts. 

I do not have the space to delve into the legal intricacies of the cases, but in essence, the suits involved two restaurant owners who asserted they lost income as a result of COVID-related government shutdown orders rather than the coronavirus itself, and therefore had valid claims that were unjustly denied by their insurers.

Judge Pamela Barker rejected the argument in Santo’s Italian Café LLC v. Acuity Insurance Co. Judge Dan Polster accepted it in Henderson Road Restaurant Systems Inc., v. Zurich American Insurance Co., thereby setting the stage for a battle in higher courts that will, eventually, settle the issue. In the meantime, I urge anyone who has business interruption coverage to file and pursue claims. 

Insurers want policyholders to believe the battle is hopeless, but in this instance, the fight may not be over until the U.S. Supreme Court has its say. That means now is not the time to surrender.

Never ones to let a good crisis go to waste, insurers are also using the pandemic to deny and delay paying other types of claims. The industry knows court dockets are jammed, which means it could take years to bring a personal injury or wrongful death case to trial. 

Absent the prospect of being forced to defend a case before a judge and jury, there is little incentive for companies to offer anything other than low-ball settlements — if they offer anything at all.  

The result of this deplorable conduct is predictable: small business owners and injury victims are desperate and struggling while insurance industry profits explode. Traveler’s recently reported that its net income grew to $827 million in the third quarter of 2020, up from $396 million in 2019. Overall, business has been so good that the industry is now sitting on $800 billion in cash reserves.

And you thought those selling N-95 masks were the only ones exploiting the pandemic for profit. In my humble opinion, it is time for regulators and legislators to start chipping away at Prudential’s piece of the rock.

—  Attorney David Betras, a senior partner at Betras, Kopp & Harshman LLC., directs the firm’s non-litigation activities and practices criminal defense law in both the state and federal courts. He has practiced law for 35 years. Have a legal question you'd like answered here? Send it to