Coronavirus, or COVID-19, is a respiratory illness that has infected the world by storm. The COVID-19 pandemic has put families in quarantine, companies out of business, and tested each country’s healthcare system. Many businesses are being required by the government to shut down temporarily or forced to minimize staff. With so many businesses being interrupted, many business owners question whether or not business interruption insurance can help policyholders make up for lost revenue.
In the wake of COVID-19, many insurance companies are preparing for the increase in filing all new sorts of claims. Insurance companies have already started denying COVID-19 claims by taking a strict interpretation of the “physical loss” or “damage” requirement. Although insurance companies argue that some structural damage to the property is required, policyholders should not accept an insurer’s initial denial of coverage. The United States, let alone the entire globe, has never seen the effects of COVID-19, and the impact the pandemic has had on insurance companies and business owners will be seen for years to come. Despite insurer’s strict interpretation of policies, Crestview Public Adjusters is here to tell you that strong counterarguments can be made in your defense, and future court decisions will be dictated based upon the aftermath of COVID-19.
Does COVID-19 Fall Under My Business Interruption Insurance Policy?
First, let’s define what exactly business interruption insurance is. Business interruption insurance is coverage, in the event of a loss, to replace a business’ income. Business interruption insurance also can help pay for business expenses like employee wages, taxes, rent, loan payments, and relocation expenses. Coverage for business interruption insurance under a property policy is initiated by direct physical loss or damage. However, if a business is required to close to avoid spreading a contagious disease, the direct physical loss to trigger a business interruption insurance policy won’t be met. Contagious diseases like COVID-19 are not considered as a covered loss, and even if a direct physical loss does occur to the property, the wording of the policy may cause more hiccups in the process.
Potential Exclusions In Your Policy Against COVID-19
The wording of the commercial property policy’s business interruption coverage may contain potential exclusions for property damage arising from bacteria, viruses, and other disease-causing agents. Crestview Public Adjusters recommends always reading the policy wording with a fine-tooth comb because the diction of the policy makes the difference for your business receiving coverage during COVID-19 and not receiving coverage. Many insurance companies incorporated exclusions claims for business-interruption losses after the Swine flu epidemic. A potential exclusion may say that any virus, bacterium, or microorganism that induces physical illness cannot be counted as a loss for your business’ property, which would create an issue for businesses trying to address COVID-19-related losses. Crestview Public Adjusters recommends policyholders to review their current coverage, speak with their insurance broker, and determine what precautions they need to take to control their losses.
We Are All In This Together
At Crestview Public Adjusters, we are closely monitoring the COVID-19 pandemic. We are also monitoring numerous carriers’ coverage positions to see if modifications are being made in response to government mandates, litigation, coverage allowances, or any other factors. At Crestview Public Adjusters, we recommend that business owners should do the following tips to prepare for filing for business interruption insurance properly:
- Analyze your existing insurance programs and policies to avoid potential exposures
- Identify critical components and alternative sources for your company to continue business operations
- Prepare both you and your employees to be out of the office for an extended period of time
- Amend your contingency plan
- Have procedures in place for responding to a claim
- Record detailed information on how the loss occurred and impact the loss had on the business
- Maintain records of all losses and expenses associated with the claim and make an extra copy just in case
- Identify the impact of loss on all business associates
You don’t have to fight the insurance companies on your own. If your policy has an exclusion that negates you from receiving coverage during COVID-19, call the experts at Crestview Public Adjusters at (212) 256-1387. We will help your business receive the coverage it deserves.
