Commercial Insurance Coverage for COVID-19: Do you have Insurance to Cover Business Interruption Losses?

Do you have insurance to cover business interruption losses?

On March 23, 2020, Governor Jay Inslee announced a “Stay Home, Stay Healthy” order closing all non-essential businesses. As COVID-19 continues to spread, businesses in nearly every industry are experiencing significant losses in business income and incurring unanticipated expenses. Commercial property insurance policies may provide coverage for damage and losses due to COVID-19.

Business Interruption: Many commercial insurance policies include coverage for losses due to business interruption. These policies typically provide coverage for lost business income and extra expenses incurred as a result of “direct physical loss or damage.” Depending on the policy and jurisdiction, “physical loss or damage” can include not just visible damage, but surface infection or contamination as well. Some policies also cover losses due to communicable disease expressly.

Some insurance policies contain additional coverage for losses due to actions by a civil or governmental authority. Commercial losses due to government orders to shut down or limit business under this extension may be covered, despite any specific exclusions for losses due to virus or bacteria.

In addition, some insurance policies provide coverage for losses due to the suspension or cancellation of a business’ contracts with third parties. If your supplier cannot provide needed supplies, insurance policies may cover the associated losses.

Property Damage: While the presence or threat of COVID-19 may not be visible, businesses may still have claims for property damage. Depending on a policy’s extensions and exclusions, there may be coverage for the removal, storage, or replacement of personal property because of the virus or related government actions. For example, throwing out perishable items could constitute property damage.  How about cleaning services after someone tests positive?

How about a word on shortened statute of limitations in policies to urge people to act now?  Insurance coverage for your losses depends on the specific language in your commercial insurance policy.  We are working and available to help during this pandemic.

Call us, Chase Alvord at 206-667-0240 or Lauren Hillemann at 206-667-0242, if you would like help investigating and pursuing insurance coverage for commercial damages and expenses related to COVID-19 or the government shutdown of your business.  Stay safe and stay well.

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