Updated May 24, 2020
The novel coronavirus pandemic, or COVID-19, has forced businesses to make difficult decisions. Some businesses have had to lay off staff, and others have had to close their doors entirely. Either way, businesses around the country are suffering losses related to COVID-19.
Thanks to commercial insurance policies, you may assume coronavirus damages are covered for your business. Unfortunately, many business interruption insurance claims are being denied due to policy language detailing virus- and bacteria-related exclusions.
Has your business interruption claim for losses related to COVID-19 been denied? Don’t go through the process alone; the attorneys at WKW can help you examine your commercial insurance policy and determine your next steps.
Commercial insurance policies cover losses for businesses. Most policies are “all-risk policies,” which cover all risks and perils except for those specifically omitted. A smaller portion of policies are “recognized risk policies,” detailing what losses they cover.
Within these policies are possible areas of coverage, such as business interruption coverage, which is intended to cover losses from an event that forces a company to suspend or halt operations.
To discover whether losses related to a peril like COVID-19 are covered, look at exclusions detailed in the commercial insurance policy.
Many commercial insurance policies include a detailed list of exclusions that eliminate coverage for a specific type of risk. These exclusions allow insurance companies to deny coverage for losses falling under that risk category.
Following the SARS outbreak in 2002–2003, several insurance companies introduced a new type of insurance policy exclusion: viral exclusions.
Viral exclusions were added to several commercial insurance policies in the aftermath of the SARS outbreak due to the uptick in business interruption claims filed by policyholders suffering damages related to the virus. Now, viral exclusions may help insurance companies avoid compensating businesses for losses incurred during COVID-19.
While the language may differ, viral exclusions generally specify the following:
We will not pay for loss or damage caused by or resulting from any virus, bacterium, or other microorganism that induces or is capable of inducing physical distress, illness, or disease.
In any event, whether a viral exclusion, or any exclusion, allows an insurance company to deny your claim depends on the policy language and unique circumstances of each case.
While many commercial insurance policies include viral exclusions, the presence of a viral exclusion itself does not mean coverage should be denied.
For all-risk policyholders, the insurance company must be clear and unambiguous in identifying the risks or perils its policies will not cover. If a risk is not clearly and unambiguously excluded, it is generally covered, subject to other policy requirements. Any ambiguity in the policy is generally construed in favor of the insured.
If your business has suffered losses related to COVID-19 and you are struggling to receive compensation from an insurance company, contact the Indianapolis Insurance Attorneys of Wilson Kehoe Winingham. Our business interruption insurance attorneys can help you get the compensation you deserve. Call 317.920.6400 or fill out an online contact form for a free, no-obligation case evaluation.
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