- On April 11, 2020
The last time the U.S. insurers have dealt with anything like COVID-19 was back in 2003 with the SARS outbreak. Since then, most insurers have excluded losses due to disease in most standard property/casualty policies. Some policyholders pay extra for amendments to cover that specific loss.
The big question right now is if losses due to forced closure of a business to slow the spread of COVID19 falls under standard business interruption policies. Insurers say no – polices only cover physical damage to property.
Today during a press conference President Trump says otherwise.
Mr. Trump said that while some insurance policies specifically exclude pandemic coverage, “in a lot of cases, I don’t see it. I don’t see reference, and they don’t want to pay up. I would like to see the insurance companies pay if they need to pay.”
To date, more than a dozen commercial businesses have filed lawsuits against their insurance companies for denied business interruption claims related to COVID19. Claims were denied for a lack of proof that contamination by the virus and the government restrictions on their businesses constitute physical damage.
On April 3 a draft bill called Pandemic Risk Insurance Act of 2020 was established to assist with payments and would establish a federal backstop for pandemic insurance industry losses in excess of $250 million but has not been passed yet.
As of right now, business interruption coverage for COVID19 losses is still up in the air. Regardless, ALL policyholders should review their coverage and find out what their options are. Contact us to learn how our experts can help.