Broker Check

Why Your Business Interruption Insurance May Not Cover Coronavirus

April 28, 2020

There has been much discussion recently about business interruption insurance, or the lack of it, for the COVID-19 pandemic. Many lawsuits seeking coverage have been filed, and both state legislatures and Congress have had bills proposed to force insurers to provide coverage. Insurance companies have opposed these measures. There has also been discussion of a Pandemic Reinsurance Act possibly similar to TRIA.

To better understand the controversy, consider how to interpret an insurance policy. As a general rule, whenever a generalization followed by a specification the specification applies. In insurance, an insuring agreement (e.g. business interruption) is a generalization. Terms and conditions (requirement of physical damage, deductibles, waiting periods) and exclusions (virus or bacteria) are specifications limiting the scope of the generalization.

Since not all policies read the same, Beacon does not take a position that a particular loss is or is not covered. In case of doubt, submit a claim and if it is denied review the reasons to confirm they  agree with policy wording.