Insurance Questions Surrounding COVID-19March 16, 2020 4:08 pm
Questions Surrounding Coronavirus (COVID-19) Insurance Risks
This communication is being released to assist our agency partners in addressing questions they may receive from customers surrounding the potential threats posed by the coronavirus (COVID-19). Please be advised, as always, we encourage claims to be submitted to our office should a policyholder feel they have sustained a loss or damage to their business. All claims submitted will be investigated thoroughly and coverage decisions will be based on the specific facts to the subject claim as well as the specific policy forms and coverages written on the subject policy.
Insurance policies vary and may involve first and third-party coverages that need to be addressed based on the specific facts of each individual claim. However, we would like to generally discuss the different risks policyholders may face.
Business Interruption/Business Income Insurance CoverageBusiness Interruption/Business Income coverage, if carried on an insurance policy, is meant to protect a business for losses stemming from closure due to property damage or direct physical loss. Although policies may differ in wording or endorsements, diseases of a contagious nature typically will not be considered an insured peril under business interruption/business income insurance.
Losses arising from Civil Authority
Coverage for losses arising from Civil Authority, if carried on an insurance policy, is meant to provide protection for a business when a local, state or federal body issues a decree which limits or restricts access to a business or its surrounding areas. This type of coverage, when included or endorsed to a policy, would potentially apply to losses of income or additional expenses resulting in denial of access to the business location for which the policy is written. The coverage, if carried, is usually limited to incidents which involve direct physical loss or damage to nearby business resulting from a covered peril. This means that losses that arise from a non-covered, or excluded, peril may not be covered.
Third Party Liability Claims
Liability claims can arise when a policyholder or business negligently, through an act or failure to act, fails to protect another for which they owe a duty. General liability insurance will typically offer coverage for bodily injury or property damage which arises from an incident or occurrence in which a third party sustains injury or damage unless otherwise excluded. As noted, each individual claim and policy will be fact specific and require an investigation which involves both coverage and legal liability.
We hope this information is useful as you receive calls or contact from your customers related to the recent, and evolving, threats presented by the coronavirus (COVID-19). This communication should not be deemed or construed as a disclaimer or waiver of any rights or conditions under any policy underwritten by SPRISKA or Illinois, Indiana and Iowa law. SPRISKA will handle and investigate any claims submitted to our office to determine whether the provisions of the applicable insurance policy provide or preclude coverage based on the facts specific to each claim.