Written by Shannon Wilson

Insurance, Contracts and other remedies for COVID-19 affected businesses

Updated 4/14/2020

​Can I obtain financial assistance to mitigate the economic disruption of the Coronavirus (COVID-19) on my business?​​​​​​

SBA Disaster Loan Assistance is now available in many states, including Nevada, as part of the government’s efforts to minimize the economic disruption to our nation’s millions of small businesses. For more information on your eligibility and the relaxed criteria, click here. To apply, visit here. In addition, banks and utility service providers are considering financial service offerings and this information is fluid. We are still preparing additional information concerning these services and will provide updated information in this FAQ shortly.  ​​​​​​

 

I am unable to meet payment and performance obligations under my agreements, including my supply agreements, due to implications of the Coronavirus (COVID-19). Does the Coronavirus excuse non-performance under the relevant agreement by either contracting party? ​​​​​​

The short answer is that it depends on the terms and conditions of the agreement as well as the facts and circumstances of your situation. The first consideration is whether your contract contains a force majeure clause. Force majeure clauses define circumstances beyond the parties’ control that can render performance difficult or impossible. Should a triggering event occur, force majeure clause in your contract may excuse or delay the invoking party’s performance and may permit cancellation of the contract. We recommend that you contact an attorney to review the scope of your force majeure clause, if any, and determine how to properly invoke the same and demonstrate the existence of the fore majeure event. Failure to properly invoke the force majeure clause and provide the requisite notice may result in adverse consequences. ​​​​​​

If your agreement does not include a force majeure clause, or if for some other reason the clause is not triggered by the Coronavirus (COVID-19), the law provides additional defenses to non-performance, such as frustration of purpose and impossibility of performance, that may be available.

 

Does my insurance policy cover losses related to Coronavirus (COVID-19)? ​​​​​​

To mitigate the effect of your business slowdown, we encourage you to examine your insurance coverage and explore the possibility of filing business interruption claims (such as claims resulting from lost sales or interrupted supply agreements).  Business interruption insurance generally helps protect against lost income resulting from a covered event. This coverage is usually reflected in a separate section of, or in an endorsement to, your policy. However, the availability of coverage differs by insurance carrier and policy and must be scrutinized closely. To the extent coverage is available to protect against Coronavirus losses, the designation of a national emergency, implementation of travel bans, and governmental shutdown orders may trigger the application of this coverage. ​​​​​​

 

 

During this Stay Home 4 Nevada period, the Governor is encouraging other services, including but not limited to legal, business and management consulting, professional services and insurance services to have employees work remotely. Black & LoBello will remain “on-call” 24/7 to answer your emergency legal concerns at no charge. We know you are concerned but we are here for you.

Remember, this too shall pass. In the meantime, stay safe, stay healthy and be NEVADA STRONG!

 

 

*Please note that the Coronavirus has caused information to change rapidly. While we are making every effort to keep this page updated for informational purposes, it is in no way to be construed as legal advice. Please speak to an attorney if you need information related to your unique case, please contact us directly.*

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