Will my business interruption insurance policy provide coverage if I suffer losses related to an outbreak of COVID-19?
The specific policy language will determine the ability to recover. Coverage exists only when a loss occurs that is covered under and not excluded by the policy language. Some facts to be aware of:
- Impact of past outbreaks. Following the Severe Acute Respiratory Syndrome (SARS) outbreak, many insurers began excluding coverage for viral and bacterial outbreaks.
- Coverage analysis. Policies also often require direct physical loss or damage to covered property to trigger coverage for resulting business interruption losses, and whether contamination by an infectious disease meets this standard is likely to be the subject of coverage disputes in the days to come.
- Tender. Insureds who believe that they have a loss covered under a policy with business interruption coverage should consider tendering their loss to their insurer. We also recommend you consult with counsel in making the decision.
Last updated March 16
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