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BUSINESS INSURANCE and COVID-19 AHLC staff Reports
You did the responsible thing. You checked all the boxes. You did your research, and you secured all the required insurance products to open your business. You went one step farther and bought a policy to cover the loss of income due to unforeseen circumstances.
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Limit Of Insurance is shown in the Declarations. The loss or damage must be caused by or result from a Covered Cause of Loss.” Three key elements are important, he says — “suspension of… operations,” “direct physical loss or damage” and “covered cause of loss.”
But the devil is in the details especially in the world of insurThen came COVID-19. Your ance While “suspension of governor ordered your salon operations” is obvious given the closed. And reopening comes government’s closure orders, with myriad guidelines likely to “direct physical loss” and “covered slash your business. But you have cause of loss” are something else. “that” insurance policy. You’re cov“Physical or property damage... ered, right? Well, it’s complicated. requires physical harm generally evidenced by changes in Christopher J. Boggs, executhe physical characteristics that tive director of the Independent require repair,” he writes. Insurance Agents and Brokers of American Virtual University, “Consider an invisible virus on says coronavirus isn’t necessarily any property or even in the propcovered in business income loss erty, does the presence of a virus policies. But that should not stop on a surface or in the air change you from filing a claim. the physical characteristics such that repair is required? Given In a blog post last updated the everyday application and March 16, Boggs walks through meaning of those terms, no, the the business income insurance virus does not result in property agreement form and the various damage. definitions of a covered loss, explaining how and why coverage “So, there is no property dammay be denied. age as required by the form, and without property damage, busiThe form, Boggs writes, states ness income coverage does not insurers “will pay for the actual respond.” loss of Business Income you sustain due to the necessary A “covered cause of loss” is ‘suspension’ of your ‘operations’ even more complicated. Boggs during the ‘period of restoration.’ writes: “Is the presence of the The ‘suspension’ must be caused virus a covered cause of loss? Of by direct physical loss of or damcourse, whether it’s a covered age to property at premises which cause of loss or not matters only are described in the Declarations if presence of the virus can cause and for which a Business Income property damage according to 26
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