Oklahoma Supreme Court and Loss of Use Argument
During COVID-19, many businesses had to shut down and stop operating. Or, at the very least, they may have had to change their business hours and operate at a very limited capacity. Businesses that were not providing an essential service – and ones that required gathering, like dine-in restaurants or concert halls – experienced a huge amount of losses. Now, businesses are trying to recoup some of those losses. You may have heard of the Oklahoma Supreme Court and loss of use argument recently. Learn about this case and figure out what you can do if you’re a business owner struggling to recover from the pandemic.
Entz Burton & Associates, estate planning lawyers, have assisted Oklahoma families and family-owned businesses with estate planning and business law for over 30 years. Reach out to us today to schedule your free consultation and learn about loss of use with your business and other financial issues.
What Happened in the Oklahoma Supreme Court?
In September of 2022, the Oklahoma Supreme Court ruled against the Cherokee Nation, which “brought a declaratory judgment against their insurers to recover economic losses they sustained at the beginning of the COVID-19 pandemic,” according to JD Supra.
This was part of a nationwide trend where businesses are arguing that they are eligible for coverage under business interruption as part of their insurance policies. While lower courts were mostly handling these issues, in Oklahoma, the Supreme Court took it on. In the end, they joined the mainstream and ruled that business interruption insurance should not cover issues related to the pandemic.
The insurers for the Cherokee Nation argued the policy didn’t provide coverage for the insured party’s losses because there was no direct physical loss or damage sustained. Further, “the insurers contended that the business interruption coverage only applies when there is a period of restoration during which damaged property is repaired or replaced.”
In the ruling, the Oklahoma Supreme Court said, the phrase “direct physical loss or damage… to real and/or personal property” would require “immediate and actual, material, or tangible deprivation or destruction of property.”
What This Means for Business Owners
Business interruption insurance typically is used when a weather event has interrupted a business’ operations. For example, if lightning damaged your building or the wind knocked something over and it damaged your property, then you could potentially have a legitimate claim on your hands. Also, theft, civil unrest, riots, and vandalism could be covered, unless it says differently in your insurance policy.
If you want to make a business loss of use claim, then find out if your claim will actually be covered, or if you’re wasting your time. For instance, COVID-19 is probably not going to be a valid excuse for using your insurance. But, you could always consult with a business attorney to find out more information.
For instance, businesses in California, New Jersey, and New York could have legitimate loss of use claims because legislation was drafted in these states to require insurers to cover COVID-19 shutdown losses. But if you’re in Oklahoma, you may be out of luck.
It’s worth it to be in touch with your insurance company. And if you need to choose a different policy that’s more comprehensive, it could be worth it in the long run – even if it doesn’t cover pandemics.
Any time you experience a loss, thoroughly document it. Then, it’ll be easier when it comes time to make that claim since you have proof.
Plus, you should follow news about other businesses. If they have been successful making claims, perhaps you could be, too.
If you’re experiencing hardship because of the pandemic, or any other event, then look into your options for business financing. You may be able to get a low to cover your expenses and get back on your feet.
What a Business Lawyer Can Do For You
A business lawyer will be well versed in legislation and cases regarding loss of use insurance. They will guide you on how to make a claim and hopefully get some money back from your insurance provider.
Your business lawyer can advise you on ways to move forward with your business. Perhaps you need to come up with a new business plan post-COVID, find a partner for your business, or dissolve and form something new. Your lawyer will help you gain much-needed clarity during this difficult time.
The past two years have been extremely tough for business owners all around the world. The road to recovery is long and hard.
Even though it’s an investment, finding a business lawyer in Oklahoma could lead to much bigger and better things for your business, and a much brighter future ahead. It’s worth it to get in touch now.
Contact Entz Burton & Associates
If you need help with any business issues at the moment, including COVID-19 claims, then get in touch with Entz Burton & Associates today for your free consultation. Call us at 405-773-9800 or 800-633-7230, or contact us on our website. We look forward to helping you with all your business needs.
Attorney J. Michael Entz at Entz Burton & Associates is an experience lawyer in estate planning law, business formation and asset protection serving the families in Oklahoma City and Weatherford office.