Understanding Your Insurance Policy
Agents, brokers and customers may have questions on insurance coverage when it comes to how COVID-19 is affecting them – particularly with business interruption insurance. Several types of insurance, including business interruption, have provisions and exclusions that may be triggered as a result of COVID-19 or other viruses and communicable diseases.
Insurance for business interruption can provide coverage when a policy holder suffers a loss of income due to direct physical loss or damage to covered property at its location or another location. It does not cover loss of income due to market conditions, a slowdown of economic activity or a general fear of contamination. Nor does the policy provide coverage for cancellations, suspensions and shutdowns that are implemented to limit the spread of the coronavirus. These are not a result of direct physical loss or damage. Accordingly, business interruption losses resulting from these types of events do not present covered losses under our property coverage forms.
Even if there has been direct physical loss or damage to property, your policy contains a number of exclusions that are likely to apply to business interruption losses. The most important exclusion to note is the exclusion for losses resulting from a virus or bacteria, which would include coronavirus.
Please refer to your Insurance Policy for additional provisions that may apply. Coverage can depend on underwriting qualifications and state regulations. If you have questions regarding your policy, please contact your agent or broker.
Several state insurance authorities have useful general information on COVID-19 and business interruption insurance, including:
- New York Department of Financial Services
- State of Connecticut Insurance Department
- Maryland Insurance Administration
In addition, the National Association of Insurance Commissioners (NAIC) and American Property Casualty Insurance Association (APCIA) published statements: