The United States declared a national emergency in response to COVID-19 on March 13, 2020, and states quickly followed with stay-at-home orders that impacted businesses and institutions nationwide. It has now been nine full months since the pandemic emerged in the United States and businesses began to shut down in the face of contamination and civil authority orders effecting restrictions on access to and use of their premises.
If your business is considering filing an insurance claim for business interruption resulting from the pandemic, now is the time. And if your business already filed a claim that your insurer has disputed, you may need to file a lawsuit or obtain a written extension from your insurer soon.
Many insurance policies that provide coverage for property damage and business interruption contain contractual limitations provisions requiring that any suit against the insurance company for coverage of a disputed claim be filed within a specified period—which can be as little as 12 months from the start of the property damage or business interruption.
Some states have laws overriding these requirements in favor of a more liberal statute of limitations, but you should make sure you understand your rights and take appropriate action to preserve them now.
If you are considering pursuing claims for coverage of a COVID-19-related business interruption loss, it is critical that the claim be submitted well before any applicable contractual limitations period. As a practical matter, this means that to preserve your company’s rights, any claim should be filed by the beginning of March 2021, and any lawsuit should be filed early the same month. Insurers may be willing to extend the limitations period for claims that have been filed, but it would be a mistake to take it for granted that they will extend time for filed or unfiled claims.
You should review your policy without delay, with the help of a qualified insurance professional or coverage attorney, to determine whether a limitations period applies, and be sure to preserve your rights.