Railroad Clients: Business Interruption Claims Related to COVID-19
These are unprecedented times for all. We are monitoring the developments in the Coronavirus (COVID-19) outbreak and are prepared to help you with any questions you have.
It is unlikely that claims for loss of revenue or Business Interruption will be covered as a result of shutdowns due to Coronavirus for a number of reasons, but it will depend on several factors. With that said, if you have Business Interruption coverage included as part of your Railroad Rolling Stock policy, we encourage our clients to submit a business interruption claim to your insurance carrier through us, even though there is unlikely to be coverage. You can provide basic information about any claim you would like to submit to firstname.lastname@example.org, and our claims advocates will assist you.
The below provides an overview of how Business Interruption insurance generally applies. Please do not hesitate to reach out to us with any specific questions related to your insurance program.
Business Interruption Insurance Coverage for Our Railroad Clients Related to Coronavirus
It is very unlikely that coverage is available within your current policies for loss of revenue due to a business interruption caused by Coronavirus (COVID-19).
It is unusual for Business Interruption coverage to be included or purchased as part of a Railroad Rolling Stock policy that does not include coverage for damage to physical locations in the first instance. Even if your policy did provide such coverage, it is unlikely to respond to a loss caused by COVID-19, as explained below.
Business Interruption coverage was designed to offset the impact of lost revenue in the event that a covered property is physically damaged by causes like fire, wind, or water damage from pipe breaks or sprinklers. A virus (common cold, flu, COVID-19) is typically not considered physical damage. In addition, there are often exclusions or limitations for viruses, bacteria, and communicable diseases that further limit coverage.
The same guidelines apply to “contingent” business interruption coverage (which was designed to offset the impact of your lost revenue resulting from certain physical damages to the property of your customer or supplier) and “civil authority” coverage (which was designed to offset the impact of your lost revenue due to a governmental authority denying access to your insured location because a neighboring property suffered certain physical damage). Again, these coverages will probably not extend to lost income from a flu or COVID-19 outbreak, since they typically do not constitute physical damage to a covered property. Certain organizations buy separate event cancelation insurance for huge events (think March Madness, Olympics, World Cup, etc.), but even some of those policies have exclusions for viruses and communicable diseases. We are now seeing insurance companies create exclusions specific to Coronavirus.
For those organizations that have Business Interruption included on their policies, there will likely be disputes over interpretation of policy language. Should your business income be impacted by a COVID-19 outbreak or governmental order, we encourage our clients to submit a business interruption claim to your insurance carrier through us, even though there is unlikely to be coverage. You can provide basic information about any claim you would like to submit to email@example.com, and our claims advocates will assist you. However, the expectation should be that you do not have business interruption coverage for those events.