Business interruption coverage is insurance that is supposed to cover a policyholder’s losses from having to shut down abruptly. There is also contingent business interruption which kicks in when losses result from the closure of a policyholder’s supplier.
For either type of insurance to apply, there must be a “direct physical loss” to the property—for business interruption insurance—the property of the policyholder and for contingent business interruption—the supplier’s property.
The major question is whether property that has been closed due to the coronavirus is still “habitable” or open is covered under a policy to enable the business policyholder to obtain coverage. Many policies will not kick in just because you are affected, and not the actual property itself. Again, mandates for us to stay at home does not necessarily mean that the business physical premises are “impaired”; and hence, insurers are most likely going to deny coverage.
We are here to help you by reviewing your coverage and vigorously advocate on your behalf for coverage. The terms of the business interruption insurance will need to evolve, as the Coronavirus has interrupted our businesses and “standard” policies will need to be redefined.