Many business are suffering substantial losses due to the coronavirus. Will there be insurance coverage for these losses?
Suits seeking coverage have already been filed, and there is significant uncertainty as to how the courts will ultimately decide the coverage issues.
Areas of Potential Coverage
Depending on the insurance policy, potential coverages include:
∗ Loss of business income from the suspension of operations.
∗ Loss of business income caused by action of civil authorities.
∗ Crisis management coverage.
∗ Communicable disease coverage.
∗ Cancellation of bookings coverage.
∗ Event Cancellation coverage.
∗ Loss of Ingress/Egress coverage.
Whether there is coverage will depend upon the facts of your claim and the language of your insurance policies. Some insurance policies include coverage for business losses caused by viruses and other organism. Many policies exclude such coverage.
Requirements for coverage for business losses may, or may not, include the requirement of physical damage to property, and in some instances contamination by a virus may be such physical damage.
Practical Steps To Take
You should first determine what insurance coverage you have. Your broker can let you know what policies you have in force, identify potential applicable coverages, and provide you with copies your policies for review by your attorney.
Insurance policies are complicated, and you should not attempt to determine whether you have coverage on your own. Rather you should provide notice of your potential claims to your insurer.
Very importantly, you should act promptly. Your insurance policies have deadlines by which you must report claims to the insurer. Therefore, it is advisable that you provide prompt notice of your claims to your insurer.
Also, you may wish to seek your attorney’s guidance to avoid taking any actions which may jeopardize coverage and to obtain his or her advice as to coverage.
Bottom Line
In the face of this new and developing threat there is uncertainty as what coverage may be available under a given insurance policy, and you should promptly provide notice of your claims to your insurer in order to preserve your rights. If your losses are significant you may wish to review them with your attorney, in order that they may be presented as effectively as possible to your insurer to maximize the likelihood of coverage.