While pandemic-driven shutdowns continue, more and more businesses are shuttering their operations. Options for contactless delivery and curbside pickup has helped. However, many entrepreneurs who have worked hard to build their companies continue to move closer to closure.

Business interruption insurance serves as a way to cushion the blow of financial losses. Yet, many standard property and casualty insurance providers have, at best, been hesitant to approve those claims when it related to Covid-19.

Insurance companies are known for their tactics of claim denial, hoping that claimants give up, assuming that the decision is final. Over the past several months, they have fought hard against covering their customers during these difficult times. With a handful of rulings in favor of insurers, businesses throughout the nation have been looking for a glimmer of hope that would sustain them until normal operations can resume.

A Ruling Opens a Door

That glimmer finally arrived as a US District Court Judge ruled that coronavirus-related income losses should be covered, provided the claimant can prove what is referred to as “direct physical losses.” While likely to be appealed, the decision offers a path to recovering at least a portion of their devastating financial losses.

That path is a bit narrow, limiting legal claims to breach of contract following a denial. However, it could embolden businesses who were initially hesitant due to the time needed to keep their operations afloat and the albeit limited financial resources required to contest denials.

An obstacle has been removed. Yet, significant challenges remain. Proving the impact of Covid putting their businesses in peril requires proof of a direct link between the pandemic and financial losses. For far too many entrepreneurs as clocks continue the countdowns to closures.