If you are operating a business that has or is expected to sustain losses of revenue and operating expenses, check your business’ insurance policies to determine if your business is insured for Business Interruption (BI) – the loss of income and operating expenses. If so, your policy likely includes a coverage exclusion relating to viruses. This is a common exclusion that was approved for the insurance industry in 2006. The Coronavirus pandemic, however, may result in the approval of new endorsements related specifically to Limited Coverage for Business Interruption caused by Civil Authority Orders relating to the Coronavirus. If the new endorsement is approved, it remains to be seen whether such an endorsement will apply retroactively, thereby negating or overriding the “virus” exclusion in your policy.
While the Coronavirus pandemic remains dynamic, it would be wise for your business to begin now gathering the information which will support a Business Interruption claim. The potential for legislative changes and changes within the insurance industry which would facilitate the acceptance of your business’ claim, despite the exclusionary terms of your existing BI policy, is mounting. The following steps should be followed as part of your information-gathering process:
- develop a detailed narrative outlining your losses
- develop details of impairments or direct damage at your business facilities
- develop details that outline any Civil Actions or Orders or Ingress/Egress issues prohibiting access to insured locations and impairing operations
- to the best of your ability, provide details/specifics impairing suppliers/receivers
- track all costs/losses in real time. Losses have to be specifically reconciled and tied to coverage triggers
For further assistance and advice, please contact Bob Nemeroff, Esq., at 215-690-3827 or rnemeroff@fslaw.com
