As COVID-19 continues to surge in areas across the U.S., more business owners are filing claims for business interruption coverage. The NBA’s Houston Rockets are one such business to recently file a lawsuit against its insurance carrier over a coronavirus-related claim under the team’s business interruption policy.
The Rockets are the first NBA team to file a lawsuit over business interruption claim denials during the COVID-19 pandemic. The team, owned by billionaire Tilman Fertitta, sued its insurer, Affiliated FM Insurance, for the denial of its claim under its $400 million business interruption policy. Rocket Ball and Clutch City Sports & Entertainment, Fertitta’s holding company for the team and its home arena the Toyota Center, paid over $700,000 in annual premiums on its policy, according to the suit. Some insurers stopped offering coverage for pandemic events after the SARS outbreak in 2004 and the Zika outbreak during the 2016 Summer Olympic Games in Brazil. Despite this, multiple sports franchises have managed to recover some pandemic losses.
For example, both Wimbledon and the National Collegiate Athletic Association (NCAA) had their policies triggered when COVID-19 was declared a pandemic. Wimbledon received an estimated $141 million payout, and the NCAA a $270 million payout. Those claims payments allowed both organizations to cancel events and recover lost expenses. Unfortunately for many policyholders, their policies do not contain the favorable coverages contained in Wimbledon’s and the NCAA’s policies, and their business interruption claims are routinely being denied. Indeed, as the Rockets begin a legal battle over coronavirus-related claim denials, many other Texas businesses continue to fight for coverage as well.
Texas Businesses Fight for Business Interruption Coverage
Large and small businesses across the Lone Star State have been fighting for business interruption coverage due to COVID-19 since the pandemic shut down many operations in March of this year. As claims continue to be filed, denials continue to unfortunately roll in as well.
Diesel Barbershops, which operates out of 10 locations between San Antonio and Dallas, also took its policy denial to court in May after it was forced to shut down. OwnerShayne Brown stated that “at this point we’re creeping up on a couple million dollars worth of lost income,” due to the closures of all 10 locations. Brown had purchased business interruption insurance policies for each of his locations, for somewhere between $2,000 and $3,000 a year in premiums for each shop; however, his claims were ultimately denied based on policy exclusions, including the lack of physical damage to his stores and the cause being related to a viral outbreak.
Business Interruption Claims
COVID-19 has affected businesses astronomically since many shut their doors in early spring. Although some have been able to open up at a limited capacity, many others remain closed indefinitely. With the uncertainty surrounding the future of businesses and industries, one may assume insurance coverage would help; unfortunately, however, many policies contain virus-related exclusions leaving policyholders with nowhere to turn for financial help. With this in mind, an experienced insurance attorney can help navigate roadblocks, allowing businesses to get back to work without the fear of closing their doors permanently.
Covid-19 Business Interruption Claims Attorneys
At Raizner Law, we have extensive experience thoroughly reviewing insurance policies to determine what coverage is available to businesses when they need it most. When there is coverage, we help business owners hold insurance carriers accountable for delays, denials, and/or underpayments of valid claims. If your business has been impacted by COVID-19 and would like to know more about its insurance options, contact the attorneys at Raizner Law today.
