Last time I posted about coronavirus liability insurance issues, a little more than a month and a lifetime ago, I had no idea that I would be writing this post from my home office, taking my temperature every few hours because I need to go three days with no fever before I can stop self-quarantining away from my kids. I am grateful for how lucky I have been: that my kids are old enough that they've been able to handle little supervision beyond my pestering them by text; that I did not get sicker; that friends and acquaintances and even strangers have helped my family out in all kinds of ways, from deliveries of toilet paper to making masks for us; and that I have a law practice will survive my not working for a couple of weeks.
Many businesses are worried that they will not survive. One of the questions for them is whether they can recoup their coronavirus losses from their general liability insurance. These are the major issues that arise from that question:
· Does the business interruption insurance provide coverage for loss of income from coronavirus?
Most policies provide business interruption coverage in the case of "direct physical loss or damage" to the insured property (such as a fire loss).
There will no doubt be litigation over whether the coronavirus itself is damage to the property, at least where there were known cases of coronavirus at the business which caused it to shut or lose revenue.
Many policies have an exclusion for losses due to viruses or bacteria. The courts will have to address whether a “pandemic” comes within that exclusion
Many policies also provide business interruption coverage if the losses are caused by “civil authority,” where access to the business is prohibited by an act of government. (For example, after the Boston Marathon bombings, the government shut down businesses near the bomb site.) Such losses do not require direct physical loss or damage to the business property, but are generally limited in scope to a few weeks.
· Is there any chance that insurance will provide coverage even if coverage seems to be excluded by the language of the policy?
· What do I do if my insurer denies my business interruption claim?
· What do I do in my insurer says that there is coverage for my business interruption claim?
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