Businesses across the country are trying to deal with the economic fallout caused by COVID-19 and subsequent shelter in place orders. Some have had to close completely, while others have had to significantly reduce their operations. Those businesses that maintain complete insurance coverage are wondering whether their insurance policies cover the types of catastrophic business interruption they have been experiencing.
The answer at this point is unclear, and the likelihood of coverage is hard to determine. However, there is one step that anyone interested in coverage should consider as soon as possible: Businesses should talk to a professional familiar with assisting policyholders with insurance claims and consider whether it might be appropriate to put its carriers on notice of the loss and claim.
A first-party property policy, which most businesses maintain, might provide coverage for business interruption claims. We say "might" because even with a comprehensive property policy, it is unclear whether there will be coverage for a COVID-19 loss. If coverage exists, policyholders will have to establish that the policy's language is broad enough to include claims associated with COVID-19 and not specifically excluded by the coverage carve-outs that are often included with these policies.
Every policy is different, so it is important to review all of the policy language, including any endorsements and riders that might have been attached to the policy and submit your claim so as to best fit within the policy coverage. State law may also play a role in whether coverage exists under a particular policy because state law dictates how specific provisions in a policy are interpreted, and the federal government may act in a manner that helps insurers address claims. Some businesses may also have other coverage that might be applicable such as Environmental Liability Policies.
Whether you decide to pursue coverage further after submitting a claim and obtaining a response from your insurer will depend on many factors which are currently unknown. However, if you are interested in putting yourself in the best position to obtain coverage that might be available, there is no time like the present.