Facebook, the largest social media company in the world, is facing both federal and state antitrust lawsuits for alleged anti-competitive business practices. The lawsuits allege that the social media giant has abused its influence in the market to choke out competition and keep itself dominant in the tech industry. If the lawsuits are successful, it could force the company to divest itself of some of its assets, including other social media platforms it has acquired over time. Continue reading “Facebook Faces State and Federal Antitrust Suits”
A federal district court has ruled that the Fair Credit Reporting Act (FCRA) preempts state credit reporting laws, curtailing the ability of state governments to place restrictions or regulations on credit reporting practices. In effect, this means that states can only put laws about credit reporting into place when they do not conflict with the FCRA. This decision has raised concerns among privacy advocates and labor advocates, who are concerned about how credit reporting might be abused. Continue reading “FCRA Preempts State Credit Reporting Laws, Says Federal Court”
The major video conferencing platform, Zoom, has agreed to enter into a settlement with the Federal Trade Commission (FTC) over allegedly deceptive claims related to its security practices. The company has, for months, touted its supposedly superior security features to attract people to its platform. With this settlement, however, the company must significantly revise both its advertising and its security practices to better comply with FTC standards. Continue reading “FTC Enters Into Settlement With Zoom Over Unfair Practices”
Few states were hit as hard, or as early, by the coronavirus pandemic as New York. As such, it was also one of the first states to enact a quarantine, and one of the first to get the disease under a measure of control. As infections have begun to skyrocket and more people are being hospitalized for COVID-19, businesses are now readying themselves for another possible quarantine. Continue reading “Businesses Brace for Another Possible Quarantine”
If you have business interruption insurance, then it is possible you may have looked at the provisions of your insurance contract and seen the phrase “direct physical loss.” This seemingly simple phrase can have a significant impact on whether you are able to collect on your policy, especially if you were forced to shut down due to COVID-19. So what is direct physical loss, and how can that affect your business interruption insurance claim?
What is Business Interruption Insurance?
Business interruption insurance is a kind of insurance that covers losses you suffer due to being forced to temporarily close your business. Rather than dealing with the direct physical costs, though, it addresses lost income due to being unable to operate your business as normal. For example, it might not cover water or mold damage you suffered in a flood, but it would cover your lost income for the time it took for the damage to be repaired.
How Do I Get Business Interruption Insurance?
There are two primary ways for a business owner to get business interruption insurance. The first is to specifically purchase a business interruption insurance policy from an insurer that offers it. The second is to have a business interruption clause as part of a general business insurance contract. With this second type of insurance, because many business owners may have business interruption insurance already and not know it. You should review your general business insurance policy. It’s always a good idea to know what you are and are not covered for.
Defining Direct Physical Loss
Many business interruption insurance contracts only cover business interruptions caused by “direct physical loss” to the business. Generally speaking, this has been interpreted by the courts to mean disasters that caused direct harm to the physical property of the business. For example, damage caused by a natural disaster like a fire, flood, or earthquake might qualify. So would damage caused by burglars, rioters, or vandals.
The Coronavirus Conundrum
One of the primary issues going through the courts right now is the issue of whether business interruptions caused by the coronavirus qualify as “direct physical loss.” The coronavirus, also known as COVID-19, has devastated businesses across the country, and New York was particularly hard-hit early in the pandemic. Businesses that lost income due to the COVID-19 quarantine have been looking to business interruption insurance to cover their losses, with mixed results.
Some courts have adopted a more general definition of the term and have been willing to expand the definition from its traditional boundaries to include coronavirus-related closures. Other courts, however, have kept to a strict definition of direct physical loss, resulting in COVID-19 claims being denied outright. As it stands, the issue remains unsettled law, both in New York and across the country.
Finding a Way Past Direct Physical Loss
Even if you cannot get a court to agree that coronavirus-related losses count as a direct physical loss, you may have other avenues open to you to recover under business interruption insurance. For example, if your contract has “civil authority” coverage, you may be able to get payment due to being forced to close by the government. Alternately, you may have a clause in your contract that covers closures due to illness or infectious disease. However, you cannot be certain until you have consulted with an attorney.
If you are a business owner with a business interruption insurance plan, and you want to recover for losses suffered due to the coronavirus pandemic, you should seek out a business law attorney with experience in the field. The business law attorneys at Blodnick, Fazio & Clark are skilled and knowledgeable in the areas of business law and commercial transactions. With offices conveniently located in Garden City, Nassau County, and Babylon, Suffolk County, the firm provides high-quality legal care at reasonable prices. If you require legal assistance concerning business startups, formation, corporate acquisitions and mergers, corporate restructuring, or another business matter, call (516) 280-7105 or fill out our contact form for a free consultation.
Three separate settlements seeking approval before the Northern District of California may set a precedent for app makers dealing with children’s data. All three settlements concern the Children’s Online Privacy Protection Act (COPPA), legislation that imposes legal restrictions on how app makers and other companies treat the data collected from apps and websites targeted at children. Depending on the outcome of these settlements, it could seriously impact how apps handle children’s personal data going forward. Continue reading “Three Major App Settlements Address Alleged COPPA Violations”
Although many aspects related to the coronavirus quarantine have been relaxed across New York State, the executive order mandating the use of face masks in public indoor locations remains in effect. While most people have complied with this requirement willingly, a handful of people have vocally objected, often taking out their frustration at the policy on the workers and businesses who are often tasked with enforcing it. How is a business supposed to handle people objecting to wearing a face mask without inviting legal trouble to their doorstep? Continue reading “The Difficulties with Enforcing Face Mask Policies in Commercial Settings”
When the Paycheck Protection Program (PPP) was first passed into law along with the Coronavirus Aid, Relief and Economic Security (CARES) Act in March, it was intended to help businesses through the economic difficulties caused by the coronavirus pandemic. Businesses who struggled with paying for employees and other essential expenses could apply for PPP loans to help them endure when their business operations were negatively impacted by the virus or by quarantine measures. However, some people have been abusing the program for their own personal gain, and the United States Department of Justice (DOJ) has begun cracking down on people making false filings for PPP loans. Continue reading “Federal Prosecutors Put Pressure on PPP Fraudsters”
In the first case of its kind to be decided across the country, an Indiana Court has dismissed a claim by a business attempting to recover money under its business interruption insurance due to the coronavirus. The case has caught a great deal of attention, as it may presage other similar cases being decided around the country, including in New York, where businesses struggled to stay open during the coronavirus quarantine. However, while it is tempting to ascribe a great deal of significance to this case, attempting to apply the ruling widely may be difficult. Continue reading “COVID Business Interruption Insurance Case Dismissed by Indiana Court”
Postmates is learning the hard way that mandatory arbitration clauses go both ways, as an Illinois court has ruled against its attempt to consolidate hundreds of arbitrations into a single proceeding. As a result, the food delivery company is facing millions of dollars in arbitration fees as it is forced to defend each individual arbitration. The ruling concurs with similar rulings made against Postmates in California, where it was also ruled that it cannot consolidate these arbitrations, no matter how costly to itself. Continue reading “Postmates Loses in Federal Court, Stuck with Hundreds of Arbitrations”