Insurance coverage issues
business interruption loss


Insurance coverage issues related to the novel Coronavirus and related COVID-19 illness can occur with a variety of insurance policies. The most common issue so far has been coverage for business interruption or business income losses and extra expenses losses. However, coverage issues can occur with other commercial insurance policies, too. See below for a brief summary of the business insurance issues that are commonly arising:

Commercial Property Insurance / Businessowners Insurance (BOP)

  • Loss of business income/extra expenses (including payroll)
  • Property damage to covered property, including loss of use
  • Denial of access to premises by civil authority
  • Loss of use of premises from contamination or infection
  • Contingent business interruption from supply chain and distribution 
  • Communicable disease & virus exclusions
  • Anti-Concurrent Causation (ACC) exclusion

Commercial General Liability Insurance (CGL)

  • Claims by customers, clients, students, contractors, tenants, and others for negligent exposure to COVID-19.
  • Any business or organization may be a target but those where people gather in groups are more likely targets, such as restaurants, bars, movie theatres, event venues, healthcare facilities, hotels, long-term care facilities, schools, colleges, gyms and yoga centers, factories, warehouses, etc.
  • Employee claims
  • Claims against nutraceutical companies or other falsely promising products or services to treat COVID-19
  • False arrest for forced quarantine 

Workers Compensation Insurance (Work Comp)

  • Employee infection on the job
  • Employee infection related to employment but not during job duties, such as during commute or on premises but not on duty

Directors and Officers Liability Insurance or Management Liability Insurance (D&O)

  • Claims against directors, officers, managers, employees
  • Inaccurate disclosures
  • Failure to comply with government orders or recommendations
  • Failure to implement contingency plans,
  • Privacy breaches/cyber liability 

Employment Practices Liability Policies (EPLI)

  • Wrongful termination of employees related to outbreak
  • Discrimination in deciding which employees to furlough or lay off
  • Discrimination in rehiring or reactivating employees

Event Cancellation Policies 

  •  Covered causes of loss
  • Communicable disease and virus exclusions
  • Preexisting conditions
  • Consequential loss

Cyber Policies

  • Security or privacy breaches from employees working at home
  • Failing to update security measures due to quarantine

Insurance Agent and Broker Errors and Omissions Liability (E&O)

We expect to see claims against insurance agents and brokers related to COVID-19, including:

  •  Failing to procure business interruption or business income coverage
  • Failure to notify insurers of claim or advising insureds there’s no coverage
  • Misrepresenting that COVID-19 related claims are covered
  • Filing claims without policyholder permission, resulting in cancellation or premium increase
  • Claims by insurer principals of breach of agency agreements from misrepresentations or advocating on behalf of policyholder