The answer could be "yes". You probably should file a claim even if there may be no coverage to pay for your coronavirus related loss. 

Let us explain....

Property insurance including business income coverage

By far, the number one insurance question this week is...

Will our insurance cover our lost or reduced business income due to business interruption and extra costs related to the coronavirus?

The short answer is "no"...the standard business package policy typically and specifically excludes loss caused by any virus, bacterium or other micro-organism that is capable of inducing physical distress, illness or disease.

Property insurance policies include loss of business income related to physical damage to insured property (building or business personal property) caused by an insured peril (i.e. fire, vandalism, vehicle damage, etc.) Infectious virus is a standard exclusion.  

Of course, what actually happens related to the circumstances of any specific claim or insurance line, or how courts may interpret coverage applicability, will only be revealed over time.

General Liability

Businesses, particularly those that open their doors to the general public, may find themselves targets of claims that their negligence led to the exposure and infection of clients.

The target of such claims will be not only the business but also the business's general liability insurance and its coverage for "bodily injury." Policy exclusions typically exist for claims arising from a pandemic, virus or bacteria.  

Workers Compensation

Typically, for a workers' compensation policy to cover a claim, the loss must arise out of the course of employment. When it comes to COVID-19, it could be challenging to come to this conclusion. 

It is possible that workers compensation coverage could apply if a worker is infected on the job such as in the case of health care workers and first responders who are on the front lines of the COVID-19 outbreak. Beyond that, state work comp statutes are not expected to cover workers who contract the virus as a natural consequence of their jobs.

Management Liability (E&O, D&O, EPLI)

Coverages such as professional liability, directors and officers liability, employment practices liability might respond to infectious diseases in specific circumstances. Employer's enforcement of specific corporate and human resources policies during an outbreak could give rise to claims of discrimination against protected classes. Shareholder litigation alleging a lack of preparedness for the potential effect on corporate operations and earnings might be covered under a directors and officers liability policy.

File the claim

The bottom-line is that, in general, insurance policies are not designed to pay for the financial loss resulting from an infectious pandemic. The exposure for loss is almost impossible to forecast and therefore hard to price...thus the exclusion.

Regardless, how an insurance coverage or contract may or may not apply is "fact-driven". Carriers are generally unwilling to commit to whether or not a coronavirus incident will be covered without a specific claim to consider.

If you suffer a coronavirus related loss, we recommend that the claim be submitted to your carriers so they can specifically address what may or may not be covered.

And again, what actually happens related to the circumstances of any specific claim or insurance line, or how courts may interpret coverage applicability, will only be revealed over you'll want to be "on record" related to your specific loss.


VANTREO is here to help. Our tech-driven (and remote savvy) work force is on the job and available to serve you. If you have a question or comment regarding this topic, or anything else, just reply here.