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The outbreak of COVID-19 acute respiratory disease may cause a significant economic impact for Nonprofit & Social Service Organizations. Numerous cities across America have closed popular gathering places including sports facilities, schools, theaters, museums and other venues to limit the spread of the virus. Business closures and lost sales has lead to inquiries regarding business interruption coverage under property insurance policies. We have complied information from our partner insurance carriers to shed light on how Business Interruption/Business Income applies to these inquires.
The trigger for any property insurance policy is physical damage to insured property by an insured peril. Insurance carriers are likely to argue that the introduction of a virus does not constitute direct physical loss or damage to insured property. Many policies may also contain a contamination exclusion which includes virus, disease or illness causing agent in the definition of contaminant. Most policies do not cover a loss resulting from a virus.
Another coverage that has been put into question is Workers Compensation. The answer depends on the facts established during an investigation and the laws. Generally, for such a disease such as Coronavirus to trigger coverage, the illness or disease must be occupational, meaning that it arose out of and was in the course and scope of employment and the illness or disease must arise out of or be caused by conditions peculiar to the work.
It is important to note that every situation is unique. If you feel that your organization has a covered claim, you are encouraged to file a claim report.
We cannot answer questions about what may or may not be covered in hypothetical situations however we are available to consult with you to the best of our abilities at this time.