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COVID-19: Business Interruption and Other Insurance Coverage

States, cities and counties across the country have issued “shelter in place” or “stay at home” orders. These “shut down” orders have closed businesses nationwide. While these orders have affected us all, they can be catastrophic for people and businesses that cannot be operated from home. However there are options.


Most businesses have insurance, and several of these policies may provide relief for businesses affected by the current situation. The key is that EVERY POLICY IS DIFFERENT, and they can be confusing.

Types of Insurance to Evaluate for COVID-19 include:

  • Commercial Property
  • Pollution/Contamination
  • Event Cancellation
  • Pandemic

Examples of Potential Coverage Positions

COVID-19 Results in Damage to the Property

  • The terms of property policies vary but many contain business interruption coverage that will cover actual loss sustained by the insured from business interruption caused by a loss or damage covered by the policy.
  • Damage is commonly defined as physical loss or destruction of or damage to the Property caused by an Occurrence. Several courts have ruled that the presence of a harmful substance that renders a property unusable constitutes “direct physical loss or damage” to the property.

Government Shutdown Provides Coverage

  • Certain policies provide coverage if a civil authority prevents access to the insured’s property. Several courts have ruled actual property damage is not needed to trigger the civil authority coverage.

Disease and Contamination Coverage Extensions in Property Policies

  • Certain property policies cover business interruption losses caused by “communicable disease” or “contamination.”

Event Cancellation Coverage

  • Certain policies will cover a loss caused as result of cancellation of an insured event to which the insurance applies.


  • Every policy contains exclusions. Some contain a “virus” exclusion that is being relied on heavily by the insurance company. Just like the coverage provisions, these exclusions vary by policy and need to be read closely and evaluated with the other policy provisions.