From the loss of manufacturing ability due to supply chain interruptions to having to temporarily close your store or restaurant to protect your employees, there are countless ways a business can lose revenue during severe influenza or coronavirus outbreak.
Losses due to coronavirus could be covered under your business interruption insurance but it depends solely on your specific circumstances and wording in your policy. It is vital to have an insurance professional who will advocate on your behalf go through your policy beforehand and help you prepare your claim.
What Does Business Interruption Insurance Cover?
If your company suffers a loss of revenue from a due to disaster-related event that is covered by your insurance, you can be compensated for the loss of income. Often, policies will also cover daily operating expenses that continue even though your business is closed.
Trade Disruption Insurance
Another type of policy known as Trade Disruption Insurance can also be helpful during an outbreak of coronavirus depending on the wording of your policy. Often these types of insurance policies will cover you for losses due to:
- Quarantine
- Governmental confiscation of goods while in transit
- Embargo
- Closure of ports and transportation centers
Often insurance companies will try to deny claims unless the business interruption insurance policy specifically mentions loss from the disease. Most policies of this nature require “physical damage or direct physical loss” to the insured property. In the case of coronavirus, there is no traditional physical damage. However, when determining if you have suffered a physical loss, Courts in most jurisdictions have very little case law to help them determine whether the property that is rendered unfit for use due to quarantine or contamination constitutes physical damage. In cases like these close examination of the policy by an insurance professional is vital.
Another factor that could come into play to determine if you have suffered a loss covered by your insurance company is if the insured’s place of business was forced to close by civil authority. Again though, most policies of this nature will spell out a physical damage requirement to your property.
However, a claim for business interruption insurance was successfully made by owners of movie theaters following a forced curfew ordered by the Governor of Michigan after numerous riots broke out (Sloan v. Phoenix of Hartford Insurance Company). There was no physical damage to the theaters, but the court found the loss should be covered under the civil authority provision because they were forced to comply with the Governor’s order.
Clearly there is no easy answer to the question; Does Business Interruption Insurance Provide Coverage for Losses due to Coronavirus? This is why Experienced Public Adjusters offers free insurance claim reviews before your claim is submitted. Contact us for questions regarding your insurance policy and schedule a free consultation.