Obtaining compensation from a business interruption insurance policy over losses caused by the COVID-19 pandemic may be a challenge. The owner of Fringe Hair and Nail Salon, Ashley Kissel, is being represented by Schmidt Kramer partner Scott Cooper in a lawsuit over her denied claim.
According to the denial letter Kissel received, there was no physical damage to her business. The insurance company is not liable for losses simply because the business was shut down.
Cooper says the policy provides coverage for physical loss of use of the premises, and she did lose physical use of the salon because it was a non-essential business.
The policy specifically says physical loss of use or damage, meaning one or the other could be covered. Since the salon has been closed since March 16, Kissel’s business suffered physical loss.
The insurance company in question, Millers Mutual, did not respond to ABC 27’s request for comment. However, the denial letter says the policy does not cover viruses, bacteria or microorganisms that can induce or are capable of inducing physical distress.
Denying claims that arise because of an unforeseen situation is an industry-wide problem, according to Cooper. Although he thinks insurers should make updates to their policies for pandemics moving forward, they should still provide coverage now.
The lawsuit Cooper filed is asking for the insurance company to rescind the denial and say the policyholder has a valid claim. Discussions about compensation can be had after that.
If your business has been affected by the COVID-19 pandemic and you have business interruption insurance, contact Schmidt Kramer today to find out how we may be able to assist you.
Our Harrisburg personal injury lawyers have decades of combined experience recovering compensation from insurance companies.
The consultation is free and there is no obligation to take legal action. Our lawyers are also not paid unless we recover compensation on behalf of our clients.
Call today to learn how we can handle your case remotely: (717) 888-8888.