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Are you insured against COVID-19?

In the short time the coronavirus disease 2019 (COVID-19) was first identified in December 2019 in China, the world is a much different place. As of June 23rd, more than 9.15 million cases had been reported across over 180 countries.  The pandemic caused the largest global recession in history, with more than a third of the global population being placed on lockdown.  Businesses have all been affected in varying degrees and continue to suffer related losses.  Does your company have insurance coverage that might cover any losses?   It’s worth taking a look.

First, take an inventory of your company’s policies and the claims that you can potentially bring.  A slowdown or suspension of operations could trigger your commercial property insurance.  Specifically, it may cover your business interruption in the way of lost profits and extra pandemic related expenses (Business Income and Extra Expense Insurance).  This coverage, however, is only implicated if there has been actual damage to the company’s covered property, i.e., a direct physical loss or damage to property.  An infected employee at the worksite could trigger this coverage.  Like most policies, however, there are likely exclusions on your property policy such as mold/bacteria/virus exclusion.

Recoverable damages under business interruption coverage include lost revenue and business opportunities due to delays, project shutdowns, and job site closures.  A company may also have additional expenses associated with working remotely due to “stay at home” and other orders and restrictions.  Salaries of infected employees might also be covered, along with professional cleaning costs.  

You are also at risk against negligence claims for failure to adequately protect against the spread of COVID-19 that results in bodily injury.  Your General Liability insurance should be reviewed and may be triggered (providing a defense and indemnification against negligence claims).  

The wave of insurance coverage litigation over business losses associated with COVID-19 has begun.  Individual and class actions have been filed in jurisdictions nationally.  Not surprisingly, carriers have largely denied COVID-19 business interruption type claims, largely relying on the requirement of a physical damage.  Courts have historically, however, held that contamination is a form of physical damage or loss in the form of asbestos, gas fumes, e-coli and smoke.  

The determination of whether insurance covers COVID-19 related claims will depend on the specific terms and conditions of your policies and will be a fact-based determination on an individual policy basis.  If you need help navigating these intricate insurance policy issues,  Setliff Law can help. Please contact Pete Schurig ( at 804-377-1276 or Steve Setliff ( at 804-377-1261.

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