Does Property or Business Insurance Cover Coronavirus Claims?
As the coronavirus spreads throughout the nation, many people are going to find their households or businesses affected by the disease or events related to it. Can you make a property insurance claim or a business interruption insurance claim for your property being infected with the coronavirus (or any disease)?
New Laws Will Have Limited Effectiveness
Congress recently asked insurance industry leaders to recognize financial losses due to the virus, under standard business interruption policies. But that is only Congress giving guidance, not making law.
Don’t look to Congress or your state legislature for any laws that would help, because it has long been unconstitutional for Congress to pass any law that alters or changes the terms of private contracts. That means that if you have a policy in effect that excludes coverage for pathogens, even if a law is passed that said that these exclusions are not allowable, the law would probably only apply to contracts in the future.
Additionally, even if there were a law change requiring insurance companies to cover pathogens as part of homeowner’s insurance, the insurance companies would probably just make coverage for these diseases so expensive that most people would decline them.
First Coronavirus Related Insurance Lawsuit Filed
Of course, there is no case law on whether diseases like coronavirus are covered under insurance policies, because the disease is so new. However, a restaurant in Louisiana is suing its property insurance carrier, claiming that the government ordered shutdown because of the pandemic should be considered a covered loss under the insurance policy.
The question in the lawsuit is whether the disease is considered “property damage” as defined under the policy. If it is, business interruption insurance would kick in, providing some payments to the restaurant for lost revenue. The restaurant argues that because disease and pathogens contaminate surfaces, often for many days, the disease is considered insured property damage.
It certainly helped the lawsuit when New Orleans’ mayor declared that restaurant service be limited because the virus “causes property loss and damage.”
Look to the Language and Exclusions in the Policy
Of course, like many issues of coverage, every case is different because almost every policy has different language. The determination of coverage (or no coverage) will hinge on the language of your insurance contract, and many standard insurance contracts that cover property loss or business interruption contain exclusions for viruses or pathogens. Making things more difficult, many policies specifically only cover physical damage to property.
One large pro-consumer advocacy group is suggesting that any business owner that has been damaged by closures, or affected by the coronavirus, should fight for coverage. In addition to business interruption, businesses can also suffer supply chain problems, inability to access supplies or inventory, and event cancellations.
If you have a business and have an insurance dispute with your property insurance company, or a homeowner’s insurance claim, contact the Miami property damage insurance attorneys at Velasquez & Associates P.A. today for help.