Insurance Coverage for COVID-19 Losses

At the time of this article, the COVID-19 virus has caused 32 states to close all schools, 16 states to close all bars and restaurants, and nearly all states to cancel or strictly limit public gatherings. Several jurisdictions have imposed shelter-in-place or lockdowns, subject to certain exceptions. Economists have forecast a global impact ranging from $1 trillion to $2.3 trillion and predict that the United States’ economy is heading for recession this quarter.

Nearly all businesses and organizations will be affected. Some will be forced to suspend or reduce operations because employees test positive for the virus. Others will see declining revenue as a result of a decline in consumer spending and activity. Others will be forced to suspend operations by order of state and local governments.

These entities will inevitably seek to recover remediation costs and lost income from their insurers. This article discusses issues likely to arise from COVID-19 insurance claims, including whether the COVID-19 virus causes “direct physical loss or damage,” whether coverage for civil authority applies, whether common policy exclusions, such as those for pollutants, governmental action and viruses, apply and whether policyholders may recover lost income resulting from the COVID-19 outbreak and related economic impact.

Read more about the implications for insurance coverage for COVID-19 losses here.