COVID-19 has swept the globe leaving a trail of human tragedy and economic destruction along the way.  The extent of the economic damage is progressing as rapidly as people are contracting the virus.  While the long-term effects remain to be seen, many businesses have closed their doors either by choice or by government directive.  With no known timeline as to how long this will last, many businesses are looking to their insurance policies to mitigate their losses and seek assistance to help them ride out this storm.  If you own or operate a small business, these are some of the types of coverages and policy provisions you may want to review immediately:

1. Business interruption Insurance. General business interruption insurance is intended to protect a business from profits that are lost due to unintended interruptions to the insureds’ business operations.  These types of policies are typically triggered when the insured suffers physical damage that leads to an interruption of its business operations; such as a fire that damages the insureds’ building.  Loss in business income from a virus or bacteria is not typically considered a covered peril.  Creative arguments have been made in the past with respect to other types of losses that have resulted in court’s finding “physical damage” even in the absence of what you might traditionally think of as constituting “physical damage.”  With respect to COVID-19, it may be that similar creative arguments will be accepted by the courts. If your policy includes contingent business interruption coverage, there might be coverage available for losses that impact your supply chain if, for example, a manufacturing or shipping interruption caused a suspension of your business.  This coverage ordinarily requires physical damage to the property by a covered peril under the policy, so again, the terms of the provision are key and should be reviewed carefully.
2. CGL/Personal Liability. For most businesses, the commercial general liability (CGL) policy is the first place to look when they have a loss. Typically, CGL coverage applies when there is personal injury or bodily harm either through an accidental injury.  This coverage would be the first line of defense to any claim or lawsuit for causing, spreading, or failing to take appropriate steps to avoid transmission of COVID-19.  Be forewarned: many CGL policies contain exclusions for virus and/or bacterial related injury.
3. Virus/Bacteria Exclusion. If your policy contains this exclusion, it is possible that injury caused by COVID-19 might be excluded.  However, there are policies for certain industries, such as restaurants, hotels, and medical offices, that are more susceptible to contagious disease outbreaks and might have optional coverage to include injuries caused by a viral infection.

This list is not exhaustive.  All insurance policies should be reviewed carefully as there are many types of coverages that could apply to this novel situation and exclusions that might affect your claim.  You should consult with an attorney for any questions you have.

Visit our COVID-19 Resource Page for more updates.