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, 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.
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 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).
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.
That being said, some specific industries (like healthcare facilities, aging services or schools) might have specialized policies that extend a limited amount of Business Interruption coverage if a shutdown of your business was ordered by a governmental authority due to a communicable disease being present at the insured facility.
It is very much an “it depends” situation, and 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 will certainly work with you to understand your options at that time, but the expectation should be that you do not have business interruption coverage for those events.
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.