Clearly, unprecedented business losses have occurred due to the outbreak of the novel Coronavirus. Our Huntsville, AL, injury law firm has received several questions from businesses across the country related to their business interruption insurance coverage. In this environment, it is important to carefully assess your property insurance policies to determine whether there might be coverage for losses stemming from disruptions to your business related to the coronavirus.
Some media reports state there is no possibility of recovery from insurance for coronavirus losses. Coverage, however, may be available in some circumstances and under some policies. For instance, some courts have determined that contamination that leaves insured property unsafe or unfit for its intended use constitutes a “physical loss” sufficient to trigger business interruption coverage.
The following information should be taken into consideration:
Business interruption coverage is typically triggered in one of three ways:
Physical Loss or Damage
The mere presence of the virus at an insured facility could potentially meet this standard for loss or damage. The language in many policies require that the covered loss stem from a “covered peril.” Since COVID-19 wasn’t a known risk when your policy was written, you might wonder how it could be a covered peril. The answer is most policies cover any loss that isn’t specifically excluded. In some cases, specific policy endorsements provide coverage for losses arising out of the spread of a communicable disease, like COVID-19. Alternatively, some policies specifically exclude coverage for losses related to a virus.
Civil Authority Coverage
Government mandates to close non-essential businesses may trigger civil authority coverage, based upon your patrons and customers lacking access to your premises. Whether this coverage applies will depend upon the specific language of your policy.
Contingent Business Interruption
If a business suffers losses due to vendors being unable to supply goods based on its own physical property damage, contingent business interruption coverage can be utilized to protect you.
It’s very important to have an attorney experienced in working with insurance disputes to review your coverage. To help businesses get the benefits to which they’re entitled, we’re reviewing policies at no charge to businesses impacted by COVID-19.
We welcome you to contact us with the details of your situation. We’ve handled business insurance disputes since 1988 and are here to help you with this unique circumstance.