Business closure insurance does not pay? Don’t just accept rejection!

Insurance companies often earn their money by rejecting legitimate claims and refusing services. This is particularly evident at the moment in the far-reaching debates about business closure insurance in the hotel and catering industry. Therefore, after the damage is often before the dispute with the insurance company. Lawyers specializing in insurance law take over the entire process for their clients in such insurance cases both out of court and in court, in order to create a viable and quick solution.

As a result of the Corona crisis, restaurants and hotels are recording unprecedented slumps in sales. 71.3 percent of the hospitality industry currently see their existence at risk. This is the result of a survey by the German Hotel and Restaurant Association (DEHOGA Bundesverband), which the association published on Monday in Berlin. According to the available results, every sixth company (17.5 percent) is threatened with insolvency due to insolvency as early as November. “Our companies have their backs to the wall. Every day counts. The November aid must come now – quickly and unbureaucratically, ”says DEHOGA President Guido Zöllick. Since March, the industry has suffered massive sales losses due to the shutdown in the spring and after the restart with distance rules and capacity restrictions. And: The new lockdown in November has further unsettled the companies, according to the DEHOGA Federal Association.

In the context of officially ordered plant closings in spring and now in autumn and with the prospect that this could also happen again in winter, a key insurance issue has moved into the focus of the discussion. Business closure insurance is a special form of business interruption insurance. Business closure insurance is intended to cover your financial loss due to closure after the occurrence of a reportable illness or pathogen in the company. According to estimates by the DEHOGA industry association, around 25,000 to 40,000 businesses have taken out such business closure insurance. These regularly also contain so-called coverage extensions, which are intended to protect companies if they have to close due to official instructions according to the Infection Protection Act – as is currently happening.

The big problem is that many insurance companies fail to pay despite a claim. Practice shows time and again: after the damage is often before the dispute with the insurer. Because even the most expensive insurance contracts ultimately only offer the protection that the insurance company provides. Companies will of course try to keep their costs as low as possible in the event of a loss or to delay them entirely. In other words, you can feel more and more on the market: Insurance companies earn their money by rejecting legitimate claims and refusing services. This is clearly noticeable at the moment and has many affected restaurateurs, hoteliers and conference organizers with their backs against the wall. The insurance payments may therefore be necessary to avert insolvency, as well as the use of state aid instruments such as short-time work benefits, bridging aid and quick loans.

Entrepreneurs in the hospitality industry should under no circumstances accept the rejection of cover by the business closure insurance, bury their heads in the sand and simply accept the rejection. Damage cannot be settled within a few days or even hours, but the policyholder does not have to put up with a month-long hangover, incomplete settlement or even a rejection. Rather, he can take action against this together with an insurance law attorney and in this way prevent the insurance company from failing to pay or trying to “calm down” him with insufficient severance pay.

Experience shows that just writing a lawyer can often lead to a rethink at the insurance company. If you are initially happy to reject a regulation that should not actually cause any contradiction, the regulation will take place very quickly at the latest after receipt of a complaint before the local or regional court. The nice thing is that usually there is no complaint at all because the companies are not willing to enter into a lengthy legal dispute just after being contacted by a lawyer – especially not if the rejection of the regulation is unfounded .

In addition, there are more and more consumer-friendly judgments for restaurateurs, hoteliers and conference organizers against insurance companies that deny cover. If, after an examination of the policies, it turns out that entrepreneurs are entitled to legally secured claims, they should not shy away from using the full range of possible legal remedies up to and including insurance claims. There is a good chance that insurance companies cannot claim that COVID-19 is not even listed in the Infection Protection Act and that business closings due to this disease are therefore subject to regulation.

Important: Lawyers specializing in insurance law take over the entire process for their clients in such insurance cases, both in and out of court, in order to create a viable and fast solution. In the event of a disputed insurance claim, the legal costs are usually covered by the legal protection insurance. Therefore, professional insurance lawyers also assist in communicating with legal expenses insurers to cover the costs of the dispute with the insurance company.

Dr. Gerrit W. Hartung is a lawyer, specialist lawyer for criminal law and managing director of Dr. Hartung law firm in Mönchengladbach. The law firm specializes exclusively in consumer protection and advises restaurateurs, hoteliers and MICE entrepreneurs in the judicial and extrajudicial enforcement of their claims from business closure insurance. At www.betriebsverbindung-corona.de, Dr. Gerrit W. Hartung set up a special website for injured restaurateurs, hoteliers and MICE entrepreneurs.

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