Increased concerns over the rapid wide-spread development of the Coronoavirus has led to the unprecedented sweeping closure of business and industries throughout the country. The loss of business as a result of mandated social distancing is wreaking havoc for business owners such as bars, restaurants and retailers who without a steady stream of income are bracing for expected financial challenges. One potential source of relief may be insurance coverage provided for business interruption.
Business interruption coverage is intended to cover losses as a result of interruptions to a business’ operations as a result of natural disaster or other triggering event. Such coverage may provide for payroll, taxes, lost revenues, rent, utilities or other expenses. A similar form of coverage for contingent business interruption may be available to provide coverage for a loss of income due to a problem with a third party, such as a problem with a supplier or vendor.
There can be challenges associated with what constitutes a covered loss under such policies. Some policies exclude economic losses if the physical use of the business property isn’t effected, while others specifically carry a viral, bacterial, or biological agent exclusion from coverage. A prudent business owner should engage in a careful review and analysis of policy language to determine what coverage may be available to provide relief.