The State Bar of Michigan's Journal of Insurance and Indemnity just published Doug's new article on agent errors and omissions. You can read it here, starting on page 5. McCray Law Office usually represents clients against their insurance companies. Sometimes though, people don't get the coverage they need because an agent makes a mistake. These mistakes often go unnoticed until a loss occurs, revealing coverage is absent or deficient. In these cases, we help policyholders pursue recoveries from their agents (which are often paid by the agents' errors and omissions insurer).

Updated: May 22

The COVID-19 virus is here, and Shelter-In-Place orders have been issued in Michigan (and most states), requiring businesses to shut down. Many business-owners have commercial insurance policies with coverage for loss of business income. However, these generally apply to situations in which “direct physical loss or damage” to property requires the business to suspend its operations while repairs are completed. 

Are business income losses caused by a pandemic covered? In Michigan, the answer will likely vary from case to case. As with most coverage-related issues, whether an insured will be able to recover for such losses will depend on the policy language, including: (1) whether it initially affords business income coverage; (2) if so, whether an exclusion eliminates that coverage. These questions must be assessed in the context of Michigan law. With respect to the coverage afforded, Courts will first have to address causation issues (i.e. whether the loss was caused by COVID-19 or the Shelter-In-Place order) to determine which policy language applies. If the virus is the cause (as opposed to the order), does the presence of COVID-19 constitute “physical loss or damage”? Cases from other states imply that the answer is yes (see Gregory Packing v. Travelers, Civ. No. 2:12-cv-04418 (11-25-2014)), but the issue has yet to be addressed by the Michigan courts in the context of COVID-19. If the order is the cause of the loss, whether the policy covers “government action” or provides “Civil Authority” coverage will become an issue. 

Even if the policy's coverage is broad enough to encompass business income losses from COVID-19, insurers may claim the policy exclusions bar coverage. Some policies specifically exclude coverage for "governmental action." Others bar claims for losses caused by “Fungus, Wet Rot, Dry Rot And Bacteria,” but do not list viruses. While these exclusions might bar BI losses caused by the Black Plague (a bacterial disease), they would not bar losses caused by COVID-19 (a virus) so the exact language is critical.

Of course, many insurance adjusters will be happy to volunteer their opinions regarding whether business coverage exists. However, if these losses are covered, insurance companies face enormous potential liability, so that opinion will often be "no." If you have a COVID-19 related loss, we suggest that you not treat the adjusters assertion that there is no coverage as the final word. Instead, if you can decipher the policy (which is difficult for many attorneys), read it carefully. If, as is the case for most people, it seems like a confusing mess of legalese, get help. In either event, you should move quickly, if only to have an attorney who understands insurance look at your policy to determine if: (1) you have a potential claim; and (2) any important deadlines are approaching (see Proof of Loss post below). 

We at McCray Law Office can't guarantee that coverage exists for COVID-19 related losses of business income. However, if you have suffered a significant loss, we would be happy to discuss your claim. There is no fee for this (or any) initial consultation. We are still working our usual hours during the pandemic and are available by phone and email.

  • Doug McCray

Updated: May 22

After a major loss to your home or business, the last thing you probably want to think about is paperwork. However, there is one important form that you may need to make time for, which is the “sworn statement in proof of loss” (or just “proof of loss”).

A proof of loss is a one or two-page form that you may have to fill out, sign and have notarized. Typically, it requests the following information:

  • your name (and that of any other claimant);

  • policy and claim numbers;

  • cause, date and time of loss;

  • use of the damaged building;

  • ownership information for the property (including any liens);

  • amount of insurance;

  • amount of loss; and 

  • amount claimed.

Once the requested information is provided, the form must be signed by the claimant(s) and notarized. Often the insurance company will also require you fill out an inventory of personal property. Usually the inventory will ask for each damaged item’s description, quantity, age and replacement cost. People can lose hundreds or thousands of items in a fire or other disaster, so correctly filling out the inventory can be overwhelming. Because filling out these forms and navigating the claims process is complicated and important, it often makes sense to hire a public adjuster to help you. With respect to the proof of loss and other documents you should keep the following in mind:

1. Submit the Proof of Loss on Time

Disputes about whether an insured has complied with the duty to submit a timely, signed, sworn proof of loss give rise to many lawsuits.  Sometimes the policyholder prevails, and sometimes the insurance company wins (and the insured loses their claim). When the insured loses, it is generally because they have not submitted a timely, signed, sworn proof of loss.

The timing requirements for submission of a proof of loss are generally set forth in the insurance policy. In my experience, the most common deadlines are within 60 days of the loss or of the insurance company’s request although some policies use other time-frames. However, after a loss your policy may be a pile of ashes, and even if it is available, a layperson may have a difficult time interpreting it.

I think it is generally a good idea to assume the worst. In other words, if you think that the proof of loss due date may be approaching but cannot determine this for certain, file one. Certainly, if you receive a letter demanding a proof of loss, move quickly. Ideally, speak with your public adjuster immediately, and in any event make sure a signed, sworn proof of loss is submitted within the time frame set by the company. Failing to do so could cost you your claim. If for some reason you cannot do this, you should get a written extension (do not rely on oral assurances). 

2. Submit the Proof of Loss by a Reliable Method

The insurance company may tell you how to submit the proof of loss (in the policy, the letter demanding it, or the form itself). You should follow its instructions. However, it is good to use a backup - say, certified mail and email - which makes it more difficult for the insurer to claim it never received the proof of loss. Email is particularly good when you are up against the deadline, as it is very fast and it retains a copy of everything you have sent. Make sure you keep a copy of everything you send, and retain all certified mail documents.

3. Be Accurate

By signing the Proof of loss, with notarization, you are swearing that as far as you know it is correct. If it is not, the insurer may take the position that you have committed fraud. Guessing is generally undesirable. Everything on the form - the date of loss, its cause, the amount of loss - should be as accurate as possible.

The insurer may plug in numbers - typically low ones - before it sends you the form.  If you sign the form with the insurance company's numbers, it may later claim you agreed to its calculation of the amount of loss.  If it entered (for instance) $25,000 for a $150,000 building loss, that is a problem. You should have someone who understands your loss review the insurer's numbers to determine if they are accurate. If not, you may have to submit a proof of loss setting forth the correct numbers or take other action to deal with the incorrect calculation. 

4. Be Thorough

Blank spots may result in the insurer rejecting the proof of loss or (less frequently) denying the claim. While sometimes unavoidable, answers like "to be determined" are not as good as an accurate number. Try to get an estimate for the building repairs sooner rather than later. If there are open items, indicate that on the form, but give the insurance company as much correct information as you can.  If you are living in a hotel, list your living expenses to-date (while also stating that they continue to accrue, giving specific figures if possible).

Also, the insurer will often ask that supporting documentation be submitted as part of the proof of loss, such as estimates, personal property inventories, and copies of receipts. You should include all such documents you are able to obtain with the proof of loss submission, and supplement your initial documents if more information becomes available. Again, retain a copy of everything you submit.

Lastly, if more than one person is making a claim - for instance, a husband and wife - they both need to sign the form, and of course it needs to be notarized.


Dealing with the proof of loss requirement can be a headache, and is the last thing most policyholders want to deal with following a disaster. However, careful attention to this important condition early in the process can avoid worse problems down the road.

Disclaimer: The above passage sets forth the author's musings regarding certain general principles relating to insurance. It is not legal advice. If you are interested in retaining counsel for the purpose of seeking legal advice regarding your own loss or claim, feel free to contact us at 734-648-8030.

9864 E Grand River Ave, Ste 110-305
Brighton, Michigan 48116

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