Does Business Interruption Insurance Cover COVID-19?
The novel coronavirus and its impact on the global economy no longer need an introduction. The impact of mitigation instituted to prevent the spread of the virus is incomparable to anything our economy has previously faced, and for many, the future is gravely uncertain. For business owners exploring ways to weather the storm, many are looking to business interruption insurance to keep them afloat and prevent them from shutting their doors for good.
Like many other insurance policies, whether business interruption insurance coverage applies to your company is determined by the specific language in the policy itself. Language related to the business interruption coverage is found in either the property/casualty policy or a comprehensive package policy and is likely an add-on or rider. Once the policy holder determines they have such insurance, it is then important to find out what the policy entails to establish whether the definition of business insurance coverage included covers losses caused by COVID-19. The most important factor is to be certain that your business has an All-Risks policy.
“All risks” is a type of insurance coverage that automatically covers any risk that the contract does not explicitly omit. If there is a provision in the policy that states that you must have damage to the premises in order to get business interruption insurance, there is a possibility you may not have coverage The language a policy holder should specifically look for when determining whether business interruption insurance covers COVID-19 losses include: government actions, interruption by civil or military authority, civil authority, and so on. It is unlikely a policy will specifically include language related to pandemics or other outbreaks, but if the aforementioned language is included, your losses may be covered during this time.
The insurance industry will likely fight against paying business interruption claims for restaurants and other businesses under emergency declaration orders to shut down. The overwhelming amount of businesses making claims may lead to an initial denial of coverage becoming a standard business practice. Therefore, an attorney may be needed to determine whether coverage due to losses related to coronavirus is covered by your policy.