When COVID-19 ground the world to a halt, policyholders and insurance-coverage attorneys made predictions about the effectiveness of insurance against coronavirus-related losses. And the outlook wasn’t great. This article examines a few of these predictions and how they played out. Understanding these issues will help policyholders better plan for, and protect themselves from, future outbreaks.

PREDICTION 1: Coverage, if any, would come from commercial property policies.

The first prediction stated that most businesses would only find coverage (if any) from commercial property policies. Specifically, coverage might come from business interruption (BI) coverage or from Civil Authority coverage, both of which are standard in property policies. BI coverage pays for lost income and other losses arising from disruptions to the insured’s business operations caused by the direct loss of, or damage to, covered property. Civil Authority is similar but does not require direct loss or damage to an insured’s property; instead, it covers losses caused by a government order that closes or prohibits access to the property.

Originally published in Nevada Lawyer - November 2021. Nevada Lawyer is the official publication of the State Bar of Nevada. Their mission is to publish items of interest and importance to the Nevada legal community and to provide a forum for thoughtful and respectful commentary on current issues affecting their members.