Do you know if you have Business Interruption Coverage? Have you even though about asking your Insurance Agent about what coverage you have, and if any of your policies provide any sort of coverage related to business interruption during this time of shut down, restricted, or severely limited operations? Here are a few pointers and helpful tips to study before you pick up the phone to give them a call.
With many businesses shut down, restricted or severely limited in their operations due to the Covid-19 outbreak, they should be looking to their Business Interruption Insurance Coverage for some relief. So you might ask, what is “Business Interruption” insurance?
Business interruption insurance covers losses of revenue resulting from 'covered events' described in the policy that cause an interruption of 'normal' business (sometimes described as 'business as usual).
Would the Covid-19 pandemic be 'covered event'?
It is unlikely that the Covid-19 pandemic would be a covered event since most Business Interruption Insurance requires some sort of physical damage to the business premises to trigger coverage. However, under certain policies, government-mandated travel bans, business closures, and restrictions on gatherings can qualify as a covered peril and with more and more local, state and federal mandates limiting business operations such as number of patrons, or types of businesses that can be open to the public, etc. these perils may well trigger the Business Interruption policy.
If the policy provides coverage, what kinds of losses will be covered?
While the terms of the policy will strictly apply, most policies will cover lost revenue, rent or lease payments, wages, taxes, and loan payments, among other things.
If a business doesn't specifically have a Business Interruption Policy, does that mean they don't have any coverage under any of their other Business Insurance Coverages?
Now is the time for every business to contact their local insurance agent and review their commercial insurance policies to see if any of their various policies or provisions contain any coverage related to any aspect of business interruption.