In March of 2020, the whole world was changed. The most devastating pandemic of the 21st century caused businesses to shut down, minimize operations, shed employees, and suffer significant financial losses.

Today, COVID-19 continues to disturb the worldwide supply chains and revenues. Companies continue to lose profits and incur additional costs. Several businesses are turning to their commercial insurance policies, hoping to claim alleviation.

Many have claimed business interruption insurance as it is the most plausible provision. Technically, a pandemic like COVID can be ruled as an unexpected natural calamity.

However, whether or not a business is entitled to a payout significantly depends on its policy’s language and the circumstance of the loss. Claiming with COVID as a rationale can be complicated and difficult.

Business coverages technically require physical damage to validate a claim. When an infection happens, employees might be covered for by health insurance, but the company itself might not regain its financial losses.

If you own a ranch and the cows die of disease, you could claim for loss of revenue that amounts to the potential profit you would’ve acquired. If your employees get ill, they could receive money from your health insurance, but your revenue loss from employee absences would be a different story.

Also, there is a thin but ever-present line separating damage from contamination like how COVID will be considered as any of such when a claim is made significantly depends on the policy and situation.

Business Interruption Insurance – What is It?

A business interruption policy is an insurance service whose goal is to secure a business owner from encountering financial losses that result from a company’s inability to put an insured asset or property that has been impaired by a peril-in-contract to its regular and profitable use.

A business interruption insurance claim typically covers revenue loss that an owner could have acquired if the “business interruption” in question hadn’t taken place. It also provides coverage for the continual operating expenses incurred in the period required to restore the property from its damaged state.

Physical Property Damage – The Trigger for Business Interruption Coverage

Usually, you can only regain revenue loss from your business insurance policy when physical damage to your property happens. When products, hardware, employees, and others suffer damages, then you are entitled to claim money from your insurer.

Thus, property damage insurance is a minimum requirement, and the policy is commonly part of a commercial property insurance contract. Hence, physical damage is often required for any coverage to be given, and business interruption for reasons other than physical damage is not enough for a claim.

Here’s an example.

There was a company whose business was supplying cooking oil and products made from beef tallow. When the USDA disallowed the importation of beef products from Canada because of mad cow disease, the company made a claim for business interruption coverage.

After investigating the damage, the embargoed product was declared uncontaminated, leading the court to justify that the policy in question may not cover any loss. If the property, cooking oil and shortening, had evident contamination or damage, the company would have succeeded the claim.

When it comes to commercial property insurance, policies may cover losses incurred by a government-enforced property closure.

Coverage typically applies when an insured is disabled to utilize its property for operations and profit because of a civil authority’s order. The usual reason is physical damage to a nearby property.

The principle tells us that civil authority claims usually require physical damage to trigger coverage – just like with business interruption policies and general commercial property insurance.

If any physical damage evidence does not back up a business closure or revenue loss, coverage typically will not occur.

Business interruption insurance policies can also secure an insured from financial loss that results from damage to a customer or supplier’s property. Still, the trigger will be physical damage.

Whether business insurance should cover a company’s economic loss incurred by COVID can be a technical complexity. One would have to make proof of the ‘damages’ for a claim to be successful.

How COVID Triggers Coverage

Luckily, the court has recognized the emergency and severity of COVID-19. Court decisions have ruled that when a threat of contamination or actual infection happens in an insured property or an adjacent property, a claimant must receive insurance from the business interruption or commercial property policy.

When the government orders a lockdown, an insured can claim for coverage of financial loss from the insurer.

COVID damages are now equal to physical damages.

If you own a business or company and are needing to regain lost revenue, cover for affected salaries, or recovery from losses that resulted from a total shutdown of business operations, and other unfortunate effects of the pandemic, you can hold your insurance carrier accountable. All you need is to have a strong claim.

You will need the help of an expert public adjuster like allcityadjusting.com to get the most out of your insurance policy because an insurance company’s natural motive is to pay you less or nothing. Insurance companies do not earn by giving money.

Suppose you have a business or company that has business interruption or commercial property insurance coverage and are suffering losses because of the pandemic. In that case, you need to call a lawyer as soon as possible so that you can claim money for your recovery.