It should come as no surprise that during the COVID-19 outbreak and the ensuing business closures and curtailments, particular attention has been paid to what business interruption insurance covers and does not cover.
Unfortunately, the response is that policyholders will not be covered in the majority.
According to the Insurance Information Institute’s chief actuary and senior vice president of research and education, James Lynch, FCAS MAAA,
“The standard business interruption policy only applies when the business sustains direct physical loss or damage, such as a fire.”
When a nearby business sustains direct physical loss or damage and a civil authority like the government closes all businesses as a result, business interruption can also apply.”
Nothing is actually broken by viruses. According to what Wiggin and Dana partner and Quinnipiac
University School of Law insurance law professor Michael Menapace told Insurance Information Institute reporter Jeff Dunsavage: In contrast to a fire or wind-damaged windows, the virus leaves no visible trace.”
