By, Justin M. Thomas, Esq. and Molly Chafe Brockmeyer, Esq.
The onset of the recently declared pandemic, COVID-19, has injected great turmoil into everyday life and has disrupted business as usual for companies and organizations, without prejudice to size or net worth. The impact on businesses has been and will be devastating for many. One question raised is whether insurance covers any of the losses associated with COVID-19. Traditionally, coverage for “business interruption” or “business income” losses are a component of coverage under a commercial property policy as a defined coverage in the main grant of coverage, through a special add-on endorsement or a separate coverage form. To trigger coverage, most policies written on ISO-based forms will require the business income losses to be tied to a covered loss, namely, A “direct physical loss or damage” to the covered property. Whether the virus constitutes “direct physical loss” will be s critical key issue. Another provision to be aware of is the “pollution” exclusion but whether the coronavirus fits that description depends on the policy’s definition, which may or may not include “viruses.” Importantly, some policies provide additional coverage where a civil authority prohibits access to the insured premises or takes action in response to a dangerous condition.
To assist in navigating through these uncertain and turbulent economic times, should you think you might have a claim on a policy for losses related to COVID-19, we recommend the following steps:
1: Locate your policy(s) and examine your available coverages. Coverages could range from event cancellation and cast insurance, property insurance, general liability insurance and workers compensation and employers liability, political risk, and business interpretation. When in doubt about whether your policy may provide coverage, contact an attorney.
2: Keep detailed records of out of pocket expenses, inventory losses, and any other records that can assist in showing losses from the COVID-19 pandemic and begin assembling the financial data from years past which will serve as the proof of the losses being presently felt by your insured business. Additionally, compile any local, state or federal directives that have contributed to the closure or loss of business experienced from COVID-19.
3: Report the claim to your insurer immediately pursuant to the terms of your policy which may include requirements of written notice, phone call reporting and even entry of initial claim information on your insurers website to initiate a claim. In the initial claim process, take special note of any policy requirements in the claim notification process such as specific addresses or departments required for notice under the policy. Be sure to document the specific details of any conversations had with the insurer or claim administrators. Policies might have other conditions that require an insured to cooperate, not admit liability, or incur expenses with the insurer’s consent.
4: When in doubt, contact your insurance professional and seek legal counsel conversant in insurance claim presentation, as there are many hurdles to overcome in properly presenting a claim for coverage to insurers who will use each and every opportunity available under the policy to limit or bar coverage on what will likely be a flood of claims.
Boyle, Leonard & Anderson, P.A. would be happy to review your policies and provide an assessment as to whether you have any coverage under your policies as a result of the COVID-19 and its effects. Please give us a call at 239-337-1303.