October 2, 2020

Case Study

What does a Condo Association do when a severe storm destroys property? What if the storm caused more than $6 million in business interruption losses? Does the Association have the ability to keep their business online? What if they are stuck in an interminable claims process with the insurance company? This scenario happened to one of Corless Barfield Trial Group’s clients, and we are suing the insurance company for significant business interruption loss and bad faith damages.  

For many commercial property owners, Hurricane Matthew in 2016 was a game-changing storm that caused significant interruption of their operations. Specifically, many Condo Associations that own units, which are rented out to the public, had trouble getting back online and staying financially sound. Unfortunately, many insurers slow rolled their claims evaluations, and took too long to assess the damages and provide indemnity payments for repairs. Then, a year later, enter Hurricane Irma, which struck many of the same properties that were more vulnerable to the impact of wind and water. Had insurers acted timely and fairly from the start, policyholders would have been able to recover sooner and suffered less in the interruption of their businesses.

Business Interruption Loss – Defined

The lifeblood of every business is generating revenue, and getting your property back up after a natural disaster strikes. This requires skilled legal counsel who understand business interruption insurance and the insurance industry. Corless Barfield Trial Group is recognized as a leader in handling sophisticated Large Loss insurance claims and business interruption insurance matters.

We have dedicated our law practice to helping Property Owners, HOAs, Condo Associations, Community Management Associations, and Licensed Community Association Managers maximize their recoveries when business interruption losses occur.

A business interruption loss claim requires an extensive analysis of business and financial records. Our attorneys have an advanced understanding of how insurance companies handle these complex claims, and we work closely with financial professionals and forensic accountants.

Business Interruption Insurance – Policy Limits vs. Bad Faith Damages

Business interruption cases involve protecting a policyholder against financial losses due to a business interruption. Business interruption insurance policies generally provide coverage for lost income and related costs in the event that one’s business is unable to operate. Almost all coverage for business interruption loss is limited in the amount recoverable by insureds. But what if the delays associated with Hurricane Matthew, for example, took much longer than they should have, significantly worsening the delay?

Business interruption coverage may replace your lost revenues and cover extra expenses associated with temporarily relocating your business during repairs. If there is a covered business interruption loss, this type of coverage will compensate the insured for ongoing operating expenses, lost income, costs associated with repair, and any other additional costs that result from bringing back normal business activities.

For damages arising from long delays caused by the failure of the insurance company to properly assess and cover the damages, insureds are not limited to obtaining just the amount of business interruption coverage, but can seek “bad faith” damages, under Florida Statute Section 624.155.

In some cases involving CBTG clients, insurers would assess the damages as being under the deductible, only to lose at appraisal for multiples of what their original assessment was at the time of the loss. For example, one multi-unit Condo Association was told by their insurer the damages were $225,000, which was less than their $500,000 deductible. After going through appraisal, the Appraisal Panel awarded $3,600,000, or more than 13.5 times the amount estimated by the insurer. In that case, the additional loss of revenue from the business interruption became part of the damages sought in the subsequent bad faith lawsuit.

Corless Barfield Trial Group are policyholder advocate lawyers. Hiring our skilled Florida insurance dispute lawyers means demanding compensation for all aspects of one’s business that are affected by property damage. If your insurance company is giving you a hard time about coverage for your property damage, call us at 813-258-4998.

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