The Coronavirus (COVID-19) outbreak continues to affect people around the world, while stocks plunge, and businesses suffer. Whether you operate Restaurants, Hotel Chains, Entertainment Complexes, Music Halls, Sports Arenas, Supermarkets, Retail locations, Healthcare Facilities, Hospitals, Manufacturing Plants, Trucking companies, or if you are an Independent Supplier, business interruption is now a credible threat. We have reviewed a gamut of policies and composed our findings below. Read on to learn about applicable insurance coverages and some risk factors to look out for. Please keep in mind that policy language varies from policy to policy.
Business Interruption Coverage
Many business owners are not aware that their commercial and business owner policies may have coverage to offset lost revenue due to the Coronavirus. Business interruption coverage insures directly affected operations; and contingent business interruption coverage insures indirect losses, such as when suppliers or customers are affected.
You may be covered even if there is no physical loss or damage to covered property. In many cases, if a property is deemed unusable due to intangible causes such as contamination by gases, bacteria or fumes, an argument can be made that the loss was a physical loss to the insured property.
Civil Authority Coverage
If government authorities restrict access to the area where your business is located or an area that the business depends on for its operations, Civil Authority Coverage provides protection against loss of income. Civil Authority coverage for business interruption typically begins 72 hours after the time of the first act of civil authority that prohibits access and is applied for ONLY a period of four consecutive weeks.
Carriers will pay for actual loss of Business Income sustained due to the necessary suspension of operations during the period of restoration. The suspension must be caused by the direct physical loss of or damage to property at the premise. Direct physical loss is defined as “loss of access, loss of use, and loss of functionality.” A recent addition to this definition includes “an impairment of function and value” of the insured property.” Alternate interpretations suggest that a direct physical loss can exist without actual destruction of property or structural damage to property, thus opening an argument for Coronavirus coverage.
Biohazard Material Cleanup
Depending on your policy, you may be covered for the cost of sanitizing and cleaning biohazard material. Since the cleanup costs can be high and risky, reviewing policy for coverage is key.
Coverage covers expenses during the period of restoration, or increased costs in continuing business in the wake of a loss. Reimbursement can include moving a covered business to a different location while the covered property is restored. Policy coverage varies. Some carriers will ONLY pay for extra expense that occurs within 12 consecutive months after the date of direct loss.
Extended Business Income
If a necessary suspension of operations produces Business Income loss, carriers will pay for the actual loss of Business Income incurred during the affected period. Loss of income, however, must be caused by direct physical loss or damage at the described premises caused by or resulting from any covered cause of loss.
Business Income from Dependent Properties
Many insurance policies define Dependent Properties as Property owned by others whom you depend on to deliver materials or services to you, or to others for your account. Policy coverage varies. For example, Additional Coverage begins 72 hours after the time of direct physical loss and has a maximum limit of ONLY $5,000.
Event Cancellation & Abandonment
From Sponsors to Performers, Broadcasters and associated companies, event planning can result in high costs and financial commitment incurred. Event cancellation & abandonment policies protect against risks by indemnifying the insured for their irrecoverable costs if an event has to be canceled, abandoned or postponed. Communicable diseases such as Coronavirus are a standard exclusion although coverage can be purchased for this peril.
Virus or Bacteria Exclusion
One of the policy elements policyholders need to be wary of is policy exclusions. Upon review of a variety of policies, we noted a Virus or Bacteria Exclusion. This exclusion states that any virus bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease is excluded. Some policies have a virus and bacteria exclusion endorsement, some don’t.
How Do I Figure Out If I Have Coverage?
As described, there are many possibilities on how to get coverage for Coronavirus and its effect on business. The problem is that business owners do not have the experience to sift through policy language and decipher coverage. The key is to work with a public adjuster such as United Public Adjusters & Appraisers Inc. (UPA) to closely analyze whether existing insurance policies potentially provide coverage for the losses. Only an expert such as a public adjuster can position language to your benefit. UPA will dissect your policy for all possible angles to attain coverage. Our property insurance experts have years of experience in policy language interpretation.
In addition, hiring a public adjuster to manage your claim ensures that all the documents are submitted properly, your claim is maximized as having an advocate on your side protects you from any additional insurance company loopholes or headaches. We welcome the opportunity to review your policy to determine coverage and to analyze how we can help. Contact us today for your complimentary, no-obligation claim review!
*Contact a public adjuster for disaster insurance recovery and claim assistance. Contact your broker to review your current insurance policy and contact your legal counsel for legal advice regarding your business interruption. United Public Adjusters & Appraiser’s, Inc. All rights reserved.