Business Interruption Insurance For COVID-19

As more businesses close their doors amid the COVID-19 outbreak to protect their employees, clients, and vendors, or any other person they may come in contact with, many business owners are wondering whether there is business insurance coverage available during this time.

Business interruption or business income coverage may be included in your commercial property coverage. For instance, policies may provide insurance coverage for direct physical loss or damage. Under some circumstances, business interruption covers losses due to your business having to suspend its operations.

A typical scenario would be your business property suffering physical damage so that your business can no longer operate normally – the insurance company should cover loss of income experienced as a result of this temporary suspension. What is less common is for a business having to close its doors due to the coronavirus. In other words, some policies may exclude viruses or bacteria. Others may provide limited coverage in such cases.  

But if these exclusions don’t apply, the business should take a serious look into potential avenues for insurance coverage. For instance, under business interruption coverage, a physical alteration to the property doesn’t have to occur, so asbestos, toxic gases, and bacteria may be covered as being interpreted by courts to render your property or business uninhabitable.

Policies may also provide contingent business interruption coverage for loss of income due to interruptions in the supply chain, customers, manufacturers, and locations accepting your products or services. This is applicable if the reason for the interruption is a covered cause of loss.

Under civil authority coverage, if your business’s premises can’t be accessed due to actions by a government agency, you are covered – applicable to covered causes of loss that cause damage to another property within your premises and a specific distance from it.

Coverage is based on the specific circumstances surrounding your loss and policy terms. In the end, the best way to find out whether your business is covered if the company must suspend its operations, is having your policies reviewed by a licensed insurance agent.

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