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The onset of the coronavirus pandemic is devastating the global economy. Various news outlets have reported that the Covid-19 virus is impacting virtually every industry around in the United States and around the globe.

We have witnessed sporting events, travel, entertainment, event planning and hospitality industries, just to name a few taking a hard hit to their businesses. Manufacturing and service industries are feeling the impact as well.  Business owners struggle to survive and their employees are scared of losing their jobs.

On the bright side, many businesses have insurance policies for business interruptions, but few of them ever collect on it.  Of course, the insurance industry does not disseminate information to instruct a business owner who is interested in making a claim.  Additionally, after some of the prior scares regarding contagious disease, , the insurance industry has made cutbacks on the types of coverages they offer for pandemic diseases and have inserted new or broadened exclusions to their policies. They have also put strict sub-limits in place to contain their exposure.

With that being said, there are still areas of coverage that exist and it is important that you have professional assessment regarding  the type of insurance coverage you may have in place to address your lost revenues and profits.


What About My Business Interruption Insurance and Covid-19?

There are many businesses that have Business Interruption insurance as part of their first-party property insurance or as a separate insurance policy.

In general terms, business interruption insurance protects you against losses due to times when your business operations could be suspended due to some type of property damage.

The insurance industry takes the position that contagious diseases are not considered property damage. Nonetheless, there may be aveues for coverage with your existing policy.  For instance, actual contamination of your tangible property, such as a fear of contamination, may meet the definition of property damage for your insurance purposes.

For example, if your heating and/or air conditioning system becomes contaminated, it could constitute property damage. Additionally, if your business property was contaminated and you are forced to shut down, your business interruption insurance may kick in but there are limitations that include:

  1. Some insurance companies have added exclusions for bacterial or viral infections in their policies. The attorneys at The Jeffcoat Firm have seen both stand-alone bacterial exclusions and bacterial/viral exclusions. However, the language of the policy is very important and while you may have a pandemic exclusion in your insurance policy, you may still have coverage for Covid-19.
  2. Insurance companies may decide to argue that their standard pollution exclusions bar you from recovering any damages. However, the question as to whether viruses or bacteria are pollutants is up for debate and so far there isn’t a hard and fast rule that applies.
  3. There can be coverage based upon your location if the civil authorities in your area have restricted access to your business. Then, even if there is no damage to your property, there may still be coverage. Having a lawyer evaluate your policy and your circumstances is vital to collect the benefits of coverage which you been paying for over the years.

Give us a call at (803) 200-2000 if you are experiencing a business interruption and need assistance.


Get a Free Case Review


What About My Supply Chain Insurance and Covid-19?

Depending on the type of business you are in, you may have purchased supply chain insurance or Contingent Business Interruption insurance to protect you and your business against any losses that arise from your supply chain being disrupted in some manner.

In general, these types of policies exist to cover your business against an interruption in raw materials, parts, and/or supplies.

Contingent Business Interruption insurance normally will cover your economic losses which may include increased costs, local and/or reduced operations that are a result of physical damage to the premises of your suppliers.

In addition, some supply chain and Contingent Business Interruption insurance policies could cover any loss of services to your business such loss of utilities.

Supply chain insurance generally covers:

  1. Any losses that arise from disruptions from specific suppliers that are scheduled in your policy; and
  2. Your supply chain insurance may require that your supplier suffered the type of property damage that would be covered by your first-party insurance policy. This would require actual contamination.


What About My Event Cancellation Insurance and Covid-19?

Many companies in the Midlands and throughout South Carolina carry a specialized type of event cancellation insurance coverage. This insurance policy generally exists in such industries as sports, entertainment, and event planning.

In addition, your policy could be written in such a way that it includes specific coverage against cancellation because of infectious diseases such as the coronavirus.

Columbia Policyholder Counseling and Recovery attorney, Michael Jeffcoat has learned that some insurance companies have started inserting endorsements that exclude coronavirus into their event cancellation insurance policies. However, if your policy was written before 2019 it’s unlikely to carry this type of exclusion.

If you purchased express coverage for infectious disease cancellations, you should check your policy to ensure a coronavirus exclusion hasn’t been added to your policy without your express consent.


What About My Worker’s Compensation Insurance and Covid-19?  

In South Carolina, as in most states, worker’s compensation insurance should cover your employees who suffer an injury or illness while at work. Coverage is based on “work-related” injuries and are analyzed based on what time the loss occurred, the place the loss occurred and the specific activity your worker was engaged in at the time of the loss.

For example, if a nurse becomes infected with coronavirus while at work, they could have a valid claim for coverage.

The most advantageous time to plan for exposure to an infectious disease is before it actually happens. This preparation should include assessing your risks and assessing your insurance coverage before it comes into play.

Michael Jeffcoat and the experienced attorneys at the Jeffcoat Firm are poised to assist you with your business interruption insurance needs.

Give us a call at (803) 200-2000 if you are experiencing a business interruption and need assistance.


Get a Free Case Review


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