Regardless of size or type, it’s important for businesses to consider having insurance policies reviewed for potential COVID-19 claims.

Hopefully the insurance your business carries may provide some relief for the impacts of COVID-19. Policies may include coverage for general risk, business interruption, civil authority actions, ingress and egress denials, event cancellation, and other negative impacts on your business. However, insured losses often require that the insurance company be put on notice promptly of any claim. It is important that each business understand its coverages, losses that may be covered, and make it known within the company what losses may be covered so your business leaders are fully aware of what might be recovered. Depending on your policy and circumstances, you may currently have coverage to address COVID-19 impacts for supply chain interruptions, denial of property access, or closure due to the government orders that apply to you, your workers, or your customers. 

Policies can be “claims made” policies or “occurrence” based policies. If you have an occurrence based policy that is expiring soon, it may be beneficial to provide notice to your carrier of the circumstances you are aware of that may lead to claim(s) before the policy ends. For many occurrence based policies, if the notice isn’t provided before the policy expires, it may be too late to seek the protection you thought you had during the COVID-19 outbreak. So, businesses should not wait to evaluate policies and decide whether to file a notice of a claim. Failure to give timely notice can itself be a reason to deny an otherwise insured loss! 

Policies may not be clear on a “novel event” like we are all in now, so coverage could be questionable. Generally insurance policies are construed in the policy owner’s favor by the court but not necessarily by the insurance provider. In addition to providing timely notice, it is important for a company, whether coverage is clear or a bit of a stretch, to do what it can to reduce its damages as best it can. Often an insurance company will question whether your asserted damages were avoidable. By clearly documenting all the steps taken to minimize losses due to the event causing the claim, a business will put itself in a strong position to defend losses from questioning adjusters.