By Ron Parry
Most businesses have business interruption insurance that is one of the coverages provided in property damage policies. Business interruption coverage may or may not provide reimbursement for some of the losses sustained by businesses as a result of the coronavirus shutdown. This will depend on the exact language of the policy and the exact circumstances causing the business interruption.
One of the questions that courts will deal with is whether or not the presence of the coronavirus in a business location constitutes “property damage.” If a business is forced to close as a result of one or more workers being tested positive for the coronavirus then the presence of that virus might indeed be considered property damage to the place of business because of the fact that the virus may be present on door handles or other surfaces. There are prior cases where the presence of an environmental pollutant was held to be property damage. On the other hand, if a business shuts down as a precaution without any actual evidence of the presence of the virus, then there is likely no claim.
There is also business interruption coverage in many policies for losses that result from disruptions in the supply chain. Therefore, if a business is forced to shut down for a period of time because of the inability to obtain a component part for products, then there may be coverage under that circumstance as well.
If a business is forced to close as a result of an order from a federal or state government official, that also may provide a circumstance where there could be recovery under the business interruption coverage.
An important consideration will be the exclusions that are written into the policy. After the insurance industry’s experience with SARS, and the business interruption claims that grew out of that pandemic, many policies had specific exclusions of coverage arising from losses sustained as a result of viral infections.
If you think you may have a business interruption claim, the experienced insurance lawyers at Strauss Troy will evaluate your coverages provided in your policy in light of the exact circumstances that caused your business interruption. There is no charge for the initial consultation.
Ron Parry focuses his work in the areas of complex litigation, including mass tort and class actions. Ron has successfully tried more than fifty civil and criminal jury trials. He has served as lead counsel or co-lead counsel in a number of insurance and consumer class actions, including claims against life insurance companies for deceptive sales practices and interest crediting practices. Ron has also represented individuals against property and casualty insurers concerning improper claims-handling practices, as well as cases brought by state employees relating to inadequate distribution of retirement benefits.