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Is Your Florida Business Covered by Insurance During the Coronavirus Pandemic?


In addition to its ever-increasing death toll, the coronavirus disease (COVID-19) is causing unmeasurable losses to businesses in the United States. As most non-essential businesses closed across the country, and financial experts continue to warn of long-term economic consequences, many businesses begin to review their insurance policies.

Government-ordered business closures caused the loss of sales and sharp revenue declines, which is why many are wondering whether they are protected by business interruption and “physical damage” coverages. 

Physical Damage Coverage and the Coronavirus Pandemic 

As the name implies, your Florida business may be protected by this coverage if there was physical damage to your insured property by an insured peril. However, when attempting to use protections offered by this coverage, insurers may argue that the coronavirus pandemic itself does not constitute a covered peril that caused direct physical damage to or loss of the insured property.

While the pandemic of this magnitude may be considered an unforeseen event – like any other triggers that are covered under the policy – it may still not be covered due to policy exclusions. Typically, physical damage exclusions include loss or damage caused by delay, as well as the loss of use or indirect loss or damage.

Also, some policies contain the so-called “contamination” exclusion, which specifically mentions viruses, diseases, and illnesses in the provision.

Business Insurance Coverage and COVID-19: Time Element 

If you cannot prove the “physical damage” trigger, you may also have a hard time establishing your time element losses. However, some industries are luckier in this regard as they have special policies to address financial losses caused by a virus outbreak. For example, this special coverage is typically applied to the hospitality and retail industries.

For example, such clauses as “loss of attraction,” “communicable diseases,” and certain others may offer protections. Typically, this coverage may only apply to the unforeseen expenses associated with disinfection and evacuation after the building was closed due to the virus outbreak. Thus, this coverage typically does not extend to your loss of revenue.

Also, these special policies are subject to policy indemnity periods. Typically, the amount of time it takes to sanitize the property is considered the time period for recovery. Nonetheless, insurers may still give you a hard time when attempting to tap into this special insurance coverage. 

Is Your Business Covered During the Pandemic? 

Unfortunately, many businesses find themselves financially unprotected and unprepared to deal with something as overwhelming as a pandemic. However, your business may still be covered by insurance during the coronavirus pandemic, depending on your particular circumstances.

That is why you should talk to a West Palm Beach business litigation lawyer to explore your options. In some cases, the “Civil or Military Authority” clause may be applicable, though it is triggered only by physical damage. The clause applies when there is a directive by a governmental authority that affects access to your insured property.

Whether or not this extension – or any other, for that matter – is applicable in your case depends on your specific circumstances as well as the wording in your policy. Speak with our West Palm Beach commercial litigation lawyers at Pike & Lustig, LLP, to discuss your options. Call at 561-291-8298 today.


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