For business interruption insurance coverage to be triggered, the insured property must suffer physical damage by a covered cause of loss. Unfortunately, a virus is not a covered cause of loss.

When a cause of loss is excluded under an insurance policy, it is because it is either better insured under a different policy, like flood, or uninsurable, like a pandemic.

The reason a pandemic is uninsurable is that it affects everyone. Insurance is the pooling of the money of many to pay for the losses of few. When the potential of a loss is so widespread as our current situation, it is not an insurable loss.

The same holds true for contingent business interruption, meaning that a supplier must suffer an insured loss for contingent business interruption coverage to be triggered.

The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration. Information can be found on SBA loans by following this link.

Please call our office with any questions.