The Law Steps in When Insurance Companies Deny Coronavirus Business Interruption Claims

From neighborhood restaurants to some of the largest publicly traded corporations, businesses of all types and sizes are experiencing catastrophic business interruptions caused by the COVID-19 pandemic.

As they assess economic damages and struggle to keep doors open, many businesses are discovering to their surprise that insurance companies are balking at providing coverage for these losses. In some cases, insurance companies have specifically drafted clauses in the fine print of policies that exclude coverage for economic damages caused by a pandemic.

“The insurance industry benefits from an opaque and poorly regulated system of oversight that puts policyholders at a distinct disadvantage. Insurance companies often feel empowered to deny legitimate claims because business owners feel ill-equipped to mount a challenge,” said Matthew McCarley, an attorney at Dallas-based Fears Nachawati and a member of the firm’s pandemic task force devoted to fighting insurance abuse.

“Insurance industry regulation may be weak, but the law provides a critically important check on these abuses. Bad faith insurance claims can result in large damages awards that serve as punishment for these actions.”

For more information please contact Robert Tharp at 214-458-4007 or

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