As the COVID-19 pandemic has progressed over the past several months, participants in the insurance industry have recognized the likelihood of a resulting increase in claims volume. Much of the early focus has been on the ramifications to insurers that write business interruption policies. However, a broader look reveals that many disparate lines of coverage are likely to see a significant boost in claims, whether directly caused by the pandemic itself or by social, institutional and governmental reaction to it. Below we will discuss a number of coverage lines in addition to business interruption and the likely claims scenarios under each.
Business Interruption
Business interruption coverage is commonly sold as a component of commercial property insurance policies to provide relief to an insured for lost profit and extra expenses when its business operations are disrupted by “direct physical loss or damage” to insured property. Closing a business due to a threat of exposure or spread of COVID-19 is not “direct physical loss or damage” to insured property. However, lawsuits over coverage for alleged business interruption losses due to the coronavirus pandemic have already been filed, and a veritable wave of claims is likely coming.
Tuesday, April 14, 2020
Insurance:"Anticipated Coronavirus Claims Scenarios Across Major Coverage Lines"
From Insurance Journal