Is Your Business Protected Against Business Interruptions?


COVID-19 has reminded businesses of the need to have plans for business interruption, contingency processes and procedures, and human resources and staffing preparedness in the event of disaster. Additionally, businesses need to review their contacts and ensure they are protected in the event their ability to perform per contractual obligations is impeded.

Extreme events beyond the control of the parties may arise and prevent performance of a contract. These events are commonly referred to as “force majeure events.” A global pandemic such as COVID-19 will almost certainly impact a business’s ability to perform its contractual obligations, but whether or not you have force majeure protections under your contracts depends on how they are drafted. In the absence of a contract provision called a force majeure clause, a court’s decision whether to excuse an impacted party’s performance as a result of COVID-19 is uncertain.  Determining (1) whether or not your contracts have a force majeure clause; and (2) whether the force majeure clause can provide you much-needed protection against business interruptions as a result of the coronavirus are important questions that we can help you with. Please do not hesitate to reach out if you are unsure about your contractual obligations in these uncertain times!