A Commercial property policy can vary a great deal, but the standard, the unendorsed policy would probably not cover losses resulting from a disease, like the COVID-19, outbreak. However, there are additional coverages contained in a standard, unendorsed policy, which may provide coverage, including:
- Business Interruption Coverage: Besides the tragic loss of life, pandemics can also take a tremendous economic toll. Supply chains are disrupted. Businesses lose both employees and customers to sickness. Quarantines are enforced. Business interruption coverage, which pays out lost income and extra expenses incurred from a covered loss to the insured property, may provide some financial coverage. An analysis of the policy must be performed to determine the applicability of this coverage.
- Dependent Property Coverage: Dependent Property Coverage may pay out lost income resulting from a covered loss to a building where you derive revenue. Most policies do not require there to be physical damage to your building for there to be coverage, but instead, require physical damage to the dependent property. For example, if you provide services to a customer, and that customer’s property suffers damage that prohibits you from providing services, you may receive coverage through the dependent property coverage.
- Civil Authority Coverage: Civil authority coverage can afford coverage for business income losses that arise when a civil authority, such as a federal, state, or local authority, prevents you and/or your customers from accessing the premises. Civil authority coverage typically has a waiting period (e.g., 72 hours) before coverage can be triggered. Here is an example of Civil Authority measures as issued by the governor of Florida and local authorities in Panama City Beach, FL.
Update on Community Protection Against Coronavirus (COVID-19) for Panama City Beach, FL
· All public gatherings at City facilities and property with more than ten people are prohibited until May 1, 2020.
· City recreational sports leagues, tournaments, fields, and special events are prohibited until May 1, 2020.
· The Community Center at Lyndell Center is closed for the next 60 days.
· All public places/businesses/restaurants/retail stores are encouraged to have alcohol-based hand sanitizer at the entrance.
· Citizens are encouraged to utilize online or telephone services to conduct business with the City. Restaurant patrons recommended to keep six-foot distance, per Gov. DeSantis.
· Close all bars and nightclubs for 30 days, per Gov. DeSantis.
· Limit public interaction with City services in: Utility billing, Code Enforcement, HR, Civil Service, building inspection, routine police and fire contact.
Other Policies which may cover COVID-19
You may also have separate policies or manuscript policies and coverages which may provide certain coverages that respond to losses as a result of COVID-19 including:
- Loss of Attraction Coverage: Manuscript policies may include additional coverage for Loss of Attraction, which includes the adverse effects on your business in reservation cancellations or its inability to accept reservations or provide accommodations as a result of an infectious or contagious disease. Coverage may also be triggered should a local agency restrict access.
- Event Cancellation Policy: For those companies that are in the event business, such as sporting arenas and concert venues, the most direct way to get insurance coverage for a pandemic is through an event cancelation policy. Event cancellation policies are designed to provide coverage when events are forced to be canceled, including as a result of decisions made by a civil authority.
- Directors & Officers Policy: A Directors and Officers policy may provide insurance coverage if investors or customers eventually sue a company and its Directors and Officers as a result of losses incurred from failing to take timely and appropriate action, including responding to a pandemic such as COVID-19.
- Supply Chain Policy: A Supply Chain insurance policy may cover business interruption resulting from a disrupted supply chain and does not require any losses to physical property. With this coverage, if a factory’s supplier shut down due to a disease outbreak, the factory could be covered for any lost income, regardless of whether there was any property damage that caused the disruption.
- Commercial General Liability: The standard commercial general liability policy includes “disease” under its definition of bodily injury. All policies may consist of exclusions for any liability arising out of communicable diseases, just like the exclusions found in personal liability insurance policies.
Measuring the Impact of COVID-19
Recovering financial damages incurred as a result of the COVID-19 pandemic is going to be incredibly challenging and will require an expert insurance claim, business, and fiduciary guidance.
Contact Strategic Claim Consultants immediately, and we will review and assess your insurance policies at no cost to determine the likelihood that coverage may exist. Once your commercial property policy has been reviewed and evaluated, it will then be necessary to determine what the losses actually are before submitting them to the insurance company. Based on the overwhelming reach of COVID-19 and its profound impact on our local communities and economies, it is uncertain just how long these losses will impact commerce and to what extent. It is my professional recommendation that you or your organization take immediate proactive measures to protect and preserve your business and brand interests by contacting one of our professionals to assess what coverages may be available to you or your business(s) in order to address the anticipated losses that will occur.