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Business Interruption Insurance: Will Insurers Be on the Hook for Business Losses Stemming from COVID-19?

April 29, 2020

By: Michael Piccolo & Greg McNeill

This week, a Miami Beach beauty salon owner initiated a class action lawsuit against its insurer for failing to pay for losses and expenses caused by the suspension of its business due to the COVID-19 outbreak. 

The salon owner had purchased property insurance, which included protection against loss of business income and expenses due to a suspension of the salon’s business operations. This type of coverage is commonly referred to as “business interruption insurance.”

Like so many business owners across Florida, the salon owner was forced to suspend its business due to the COVID-19 outbreak. Local authorities have prohibited the salon owner from accessing and occupying its salon since early March 2020. Consequently, the salon owner lost out on weeks’ worth of vital income and incurred unanticipated expenses. 

When the salon owner looked to its insurer to honor its business interruption insurance, the insurance company refused to reimburse the salon owner for its losses. As a result, the salon owner has filed a class action lawsuit against its insurer alleging that it breached its insurance policy and seeking the court to declare that the salon owner, along with other insureds, are entitled to coverage for the loss of business income and expenses resulting from the COVID-19 outbreak. 

This class action lawsuit is one example of a burgeoning issue that is sure to play out in courts across the country: whether insurers will be on the hook for the loss of business income and expenses resulting from the COVID-19 outbreak.

Given the highly complex nature of insurance contracts and coverage issues, business owners would be well served to consult their attorneys about reviewing and, potentially, making claims on their business interruption policies for any business losses stemming from the COVID-19 outbreak. 

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This article is informational only. You should consult an attorney before acting or failing to act. The law may change rapidly and no warranty is given. LOWNDES DISCLAIMS ALL IMPLIED WARRANTIES AND WITHOUT LIMITATION, ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. ALL ARTICLES ARE PROVIDED AS IS AND WITH ALL FAULTS. Consult a Lowndes attorney if you wish to establish an attorney/client relationship.

Michael Piccolo focuses his legal practice on complex litigation, civil litigation, commercial litigation, business litigation, intellectual property litigation, significant divorce cases, and probate and trust litigation.


Greg McNeill is a trial and sports law attorney and chairs the firm's Litigation Department.

Greg's litigation practice includes business and real estate litigation, construction litigation, commercial landlord/tenant disputes, enforcement of non-competition, confidentiality and trade secret agreements, employment law, intellectual property, church property litigation and appellate practice.

As a sports law attorney, he has represented athletes and coaches in the NBA, NFL, Major League Baseball, PGA Golf and other sports in team contract negotiations, endorsement contracts, name and image licensing agreements, book publishing opportunities and public appearances.

Greg is an experienced trial attorney with considerable courtroom experience in state and federal courts. He has successfully handled a wide variety of lawsuits, from defending the property of a local church from the efforts of its denomination to seize it to the aviation litigation arising from the 1999 Lear Jet crash which took the life of PGA Tour golfer Payne Stewart. 

He is an equally accomplished negotiator and is just as proud to help a client reach a satisfactory settlement as he is to win a jury verdict. His philosophy is to prepare for trial but seek to settle.

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