Business Interruption COVID-19 Insurance
COVID-19 Insurance Coverage Alert
The novel coronavirus is having an unprecedented impact on the daily lives of everyone. Governments around the globe are scrambling to contain the pandemic. With each new day, the authorities institute stricter mandates in order to prevent the spread of the virus. These directives are creating significant, and in some cases crippling, losses for business and individuals who struggle to comply with the required closures, cancellations, and interruptions.
While the losses continue to mount, policyholders should consider the possibility that there may be insurance coverage for some of these losses. Depending on the circumstances, the ability to receive insurance benefits for these losses could provide significant relief for many businesses during this tumultuous time.
Businesses that host or organize events may have event cancellation coverage that could be triggered if events are cancelled due to exposure to the virus or in response to governmental orders. While obtaining coverage will depend on the particular policy language, businesses that were required to cancel their events should review their policies to determine if they have coverage for these losses.
Additionally, many commercial property policies contain coverage for business interruption. This type of coverage can be triggered either because of an interruption to the business itself, or because of a closure of the insured’s supplier. Both types of business interruption coverage usually required a “physical loss or damage” to property. For coronavirus losses, obtaining coverage will likely turn on the interpretation of the “physical loss” requirement in the policy.
There may also be claims that employees contracted the virus at work leading to potential worker’s compensation claims. This is particularly true for any business connected to the health care or travel industries.
There are also many businesses will be faced with liability claims for customers claiming there was a failure to adequately protect them from exposure. As a result, coverage under general liability policies could be triggered.
Regardless of the type of loss suffered, there is a possibility that an insured’s existing insurance policy could provide coverage. Accordingly, it is important that insurance coverage for these losses is not overlooked, and claims are made promptly to insurance companies.