Companies get their businesses insured to mitigate losses that could be faced in the future due to a halt in operations. The halt in operation is usually due to physical damages that a business may face. However, the pandemic has left business owners helpless with the closure of their businesses due to the viral outbreak of COVID-19. The coronavirus outbreak is not termed to be causing any physical damages, making coverage claims invalid for many policyholders. Insurance companies can deny business interruption coverage claims on the basis of no physical damages caused or by the fact that viral outbreaks have been excluded from their insurance policy.
Business Interruption Insurance
Businesses that have a business interruption (BI) insurance policy, are entitled to a coverage claim to cover for loss of income due to unexpected natural disasters. These events include extreme weather conditions, fire, explosion, or any other catastrophe which results in substantial damage to property, hardship, suffering, or possible loss of life.
Unfortunately, this does not provide for any virus or bacterial outbreaks as no physical damage to property incurs. It is only when physical damage occurs can the coverage be paid out to policyholders.
Commercial General Liability
This type of policy includes diseases under a narrower term of bodily injury. There is coverage for insured policyholders if found to be a part of accidentally spreading a disease. However, this type of policy often excludes the liability arising from any communicable diseases.
Therefore, this type of insurance will also not cover for a viral outbreak that is going on at the moment.
Environmental Liability Insurance
Environmental Liability insurance (ELI) provides coverage for property and business owners in loss of income caused due to damage through environmental factors such as pollutants and biodiversity. One could argue defining the COVID-19 viral outbreak as part of pollutants and attempt to make claims based on it.
A general policy would not include viruses or bacteria as pollutants, however, this depends on what is mentioned in the policy of your insurance. Review your policies and understand the policy language in order to be able to make claims for the viral outbreak.
Standard commercial property or general liability insurance policies will most likely not provide coverage for losses that have been closed due to the current Coronavirus outbreak. However, policies differ from one another, and coverages could vary. Before making any decision, get advice from an expert who will possess the knowledge of current rules and regulations to help you get your claims. Contact us now to get you connected to an expert and get you your claim.
Currently, no insurance policies have been designed to cater to businesses and provide protection against liability risk they face. As businesses start opening in the next phase of the pandemic, companies will have great concern regarding the legalities involved. Review your insurance policies and consult with an expert. Before considering to reopen businesses, construct a well-structured plan to accommodate all safety protocols and mitigate liability risk. Liability Risk for Businesses reopening