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Update: Coronavirus and Business Interruption Coverage

By April 2, 2020April 3rd, 2020Business Insurance

While it was just under a month ago, when I wrote my last blog, it feels like it has been over a decade.  Our world has changed so drastically, in just a short period of time.  We all find ourselves in unchartered waters.  None of us have any experience dealing with anything remotely like this.  I do not recall any event (I am 50, by the way) that has impacted our work and personal lives, so drastically.

Ever since things really started going bad in the US (mid-February, I think), I have been talking to everyone (peers, insurance company adjusters, risk managers, claims experts), reading everything I could and sitting in on any conference call or webinar about how insurance will respond to COVID-19.   My clients are ALL going to be affected by this, if they haven’t already.

My previous blog ( still stands.  I did want to add a few things that I have been thinking, a lot, about.

If your business has been shut down by a governmental order, or if your business has been suffering lost revenues because your clients have been shut down and you are curious if there could be any Business Interruption coverage on your insurance policy, I believe it is very unlikely.  The consensus of the industry is that the coverage responds when there is a direct physical loss or damage to covered property.

My understanding is, there is no damage to property with a virus.  But, it is not up to me to determine if there is coverage or not, it is up to the insurance company.  If you would like to put in a claim, we would be more than happy to help you with this.

There are a few states that are possibly exploring legislation to make insurance companies retroactively change the insurance policy language to include COVID-19 and then pay these Business Interruption losses (NJ, OH & MA).  I do not believe this attempted legislation will be successful (I think all the legislators in each of these states are on recess).  The only possibility I see would be for the Federal Government to reinsure this, but even that would be a huge stretch.

With this in mind, I do recommend that every business affected by these shutdowns and shelter in place orders keep accurate records of your lost revenues and/or extra expenses – just in case.

Please stay safe, stay healthy and stay sane.  We WILL get through this.

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