Words Matter—Read Your Policies

Do you understand your insurance policies?

When the Covid-19 pandemic forced the closure of millions of businesses, many sought relief by making claims. Many claims were on their business interruption insurance coverage on their policies.  They were quickly denied.

Insurance Denial

Gavrilides Management Company, owners of the Soup Spoon Café and The Bistro, refused to accept its insurer Michigan Insurance’s denial. They went to court to force payment of revenue lost during the lockdown. Unfortunately, the court granted Michigan Insurance’s motion for dismissal of the case.

Coverage

The court ruled that coverage under the policy is provided for actual loss of business income sustained while operations are suspended. Furthermore, the suspension must be caused by the direct physical loss of, or damage to, the property. The judge also stated that the loss must be “something with material existence… that alters the physical integrity of the property.” This shows how much the wording of all these policies matter. Both parties agreed that Covid-19 did not actually entered the property and the shutdown was due to governmental action. Since the cause of the financial loss actually was loss of access to the property not caused by physical damage, the policy coverage did not apply.

Policies Written By Insurance Companies

Remember, insurance policies are written BY insurance companies. FOR insurance companies. Your signature on the policy means that you read it. And understood it. Unless the policy provisions are written are against the law, against “public policy” or ruled ambiguous, the court will rule in favor of the insurance carrier.

Our Team Can Help You

If you have questions about your policy coverage, please review it with your attorney before you find out you need it. Rosenberg Law specializes in helping clients review their policies. We make sure to help you understand exactly what all that insurance lingo means. Rosenberg Law is dedicated to compassion, integrity, and results. Check out our insurance policy review page.