Anderson Kil attorney Finley Harckam is an excellent speaker and noted business interruption specialist. I would suggest that those considering coverage read his article, Insurance Coverage For Perils Created By The Coronavirus Pandemic. I think he highlights the fights we should expect in these coverage cases when he states the following:
While some or all of these coverages may be available for coronavirus- related losses, a variety of defenses may allow insurers to avoid, or limit, payment. First, some policies contain broad exclusions of damage caused by biological agents. Those exclusions may be found either in stand-alone provisions or be incorporated into exclusions for Pollution or Contamination….. Second, many policies contain sub-limits for some of the coverages discussed above, have waiting periods before the coverage is triggered, or both. Third, even if the presence of coronavirus is considered property damage, most time element coverages insure only the period of time needed to repair the damaged property. Insurers will argue that the virus exists for only a very short period in the air or on surfaces, and that a quick cleaning is all that is needed to eliminate it and thereby restore the property. Depending upon the circumstances of a particular loss, this argument could result in a very limited period of recovery. However, if the virus persists in people in an area recontamination is possible, which would extend the period of coverage. And as discussed above, many policies provide extended period of interruption coverage which would apply to losses incurred after the property damage has been remedied.
Further, in many instances there will be a disagreement over whether a business was closed or access was denied because of actual property damage, or as a purely prophylactic measure to prevent the spread of the disease, which the insurers will argue is not covered. To that point, the Insurance Services Office (“ISO”), an organization that drafts standard form policy provisions for the insurance industry, recently announced that has prepared forms which provide limited coverage grants for situations like the coronavirus pandemic, which, if incorporated into policies, will provide some coverage for purely preventive closures. Unfortunately, such provisions will not apply retroactively, and will likely be prohibitively expensive if marketed during the current crisis.
Finally, Bill Wilson published another post where he believes a policy may provide coverage in: Does THIS Policy Cover Business Income Losses Due to the Coronavirus Pandemic?
Thought For A Tuesday
You may have heard of Black Friday and Cyber Monday. There’s another day you might want to know about: Giving Tuesday. The idea is pretty straightforward. On the Tuesday after Thanksgiving, shoppers take a break from their gift-buying and donate what they can to charity.