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Business Interruption Insurance for Physiotherapists and Chiropractors: What You Need To Know

May 18th, 2020
Gosai Law
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On March 16th, 2020, it was announced that there was to be a mandatory, Ontario-wide shut down of non-essential businesses due to COVID-19. As a result of this order, health care workers may only provide services to the public in the case of an emergency.

Even though telecare has not been impacted, physiotherapy, chiropractic, and other paramedical businesses have been hit hard, resulting in a massive loss of income. Whether due to a natural disaster, a fire, or a global pandemic such as COVID-19, an unforeseen circumstance can lead to a significant loss of business through no fault of your own. In this article, we’re going to examine what Business Interruption Insurance is, whether you can make a claim for losses resulting from COVID-19, and how it applies to physiotherapy, chiropractic, and other paramedical clinics.

What is Business Interruption Insurance?

As a healthcare professional, it’s your job to create treatment plans that take your patient’s health and lifestyle into consideration. This is the same when it comes to selecting an insurance plan for your practice – you want to make sure that you’ve covered all angles in order to keep your business “healthy”. Purchasing Business Interruption Insurance is one of the ways you can make sure your business is covered in case of a setback.

Business Interruption Insurance can be a comprehensive insurance plan that is put in place to support you when your practice cannot. Often, these policies will differ significantly from one to the next. It is therefore important to seek out the best policy for your particular business. Business Interruption Insurance is designed to cover fixed costs and replace the income that would have otherwise been earned if the interruption hadn’t occurred. Most often, this type of insurance policy begins at the time of the loss and will continue providing financial relief until you are able to reopen your practice. 

Some insurance policies may automatically include Business Interruption Insurance, so it’s important to thoroughly check any existing policies you may have. It’s also important to note that when purchasing Business Interruption Insurance, the amount of coverage you need will likely differ from other businesses. The amount of coverage you need will depend on the type of practice and how many employees you have.

Am I Eligible If My Clinic Is Still Open Part-Time?

The simple answer is MAYBE, depending on the coverage you have purchased. For example, you may be eligible for coverage for certain expenses under some policies, even if you stay open during a pandemic. Other policies may provide you with no coverage at all. It is therefore important to refer to your particular policy, speak to your insurance broker, or consult your lawyer. 

What Can Business Interruption Insurance Cover?

Business Interruption Insurance is designed to not only replace lost income, but can also provide relief for a variety of other items. This is designed to continue until such time as you are able to fully operate your paramedical practice as you had before the interruption. 

It’s important to keep in mind that you may not be eligible for financial relief under your Business Interruption Insurance policy, depending on the unprecedented event that caused you to lose business. Such may be the case with COVID-19, financial relief may highly depend on whether or not your Business Interruption Insurance is an all-risk or an all-peril policy, as opposed to a named peril policy. An all-risk or an all-peril policy is more likely to cover unprecedented events, such as closing due to a disease or an illness, whereas a named-peril policy will be much more specific.

Most Business Interruption Insurance Plans will cover the following:

Are There Different Kinds of Business Interruption Insurance?

There are two main types of Business Interruption Insurance that may apply to your paramedical practice, with the first being standard Business Interruption Insurance. This type of insurance will provide coverage from the time that the business sustains the loss to the time that it reopens. 

The second form is called Extended Business Interruption Insurance. This type of insurance will also provide coverage from the time that the unprecedented event occurs, and will continue to provide coverage until your clinic is able to return to its previous level of profitability. Extended Business Interruption Insurance will typically provide coverage for 12 months after your business is able to reopen, but can also be extended to 24 months. Extended Business Interruption Insurance is more likely to cover additional expenses associated with getting back on your feet, such as employee overtime, relocation to a temporary site, and professional fees. 

Will I Be Covered By My Insurance Policy For COVID-19 Related Losses?

The topic of Business Interruption Insurance has received a surge in inquiries due to COVID-19. The question is, will losses sustained due to COVID-19 be covered under a Business Interruption Insurance Policy?

It’s important to read your policy carefully to determine whether or not your Business Interruption Insurance policy includes coverage for a virus or bacteria-related loss. Standard commercial policies will often specifically exclude this type of loss due to policy changes that were made after the 2002-2003 SARS outbreak. Insurance companies faced millions of dollars in Business Interruption Insurance claims as a result of SARS, which led to these policy changes. As a result, insurance companies may now be able to avoid paying out billions of dollars in claims when it comes to COVID-19.

Extended Business Interruption Insurance and all-risk/all-peril policies are more likely to offer coverage when it comes to COVID-19 related losses. This is why it’s important to read the conditions of your policy carefully and look for any clause that specifically excludes a virus or bacteria-related loss.

Submitting Your Business Interruption Claim

If you have experienced a financial loss related to COVID-19 or otherwise, you must submit your business interruption claim as soon as possible, if you haven’t already done so. It’s important to note that if your loss is COVID-19 related, you should prepare to receive some pushback in the form of a reservation of rights letter.

If you do receive a reservation of rights letter, it will likely tell you that COVID-19 does not apply in the context of “direct physical loss or property damage.” Do not let this letter discourage you from pursuing your losses under the policy and press onwards with your claim. You must keep in mind that Business Interruption claims that have been denied in the time of COVID-19 have not yet had the opportunity to be tested by our courts. A denial by the insurer by no means is the final decision on whether you are entitled to your expenses and losses. That decision will remain with our courts when litigated. 

How Can I Find Out What Type of Policy I Have?

If you are in the physiotherapy, chiropractic, or paramedical field and are unclear on what your Business Interruption Insurance policy covers, you don’t need to worry. We at Gosai Law can identify for you which type of policy you have, exactly what it covers, and how to file your claim to collect your losses. That way, there is no more guessing about whether or not your clinic is going to be covered as a result of COVID-19, or any other unprecedented loss your business may face.

While our physical office location is currently closed, we are more than happy to offer a free review of your policy remotely. Please feel free to reach out to us at info@gosailaw.com so we can assist you with your Business Interruption Insurance claim as soon as possible.

Other Content for Healthcare Professionals:

How to help your patients with OCF Forms?
The role medical professionals play in the lawsuit process.
What information you should tell your patients during personal injury lawsuits.

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