The Coronavirus has disrupted people from all walks of life, business owners included. Local and state governments along with health authorities are responding to this disruption with immense precaution. However, it’s having and will continue to have a lasting impact on the business world. As a result, business owners question the extent to which any of the anticipated business interruptions might be covered by their insurance programs. MMA is here to help guide you through any possible commercial property insurance losses that may be a result of this troubling time. 

Will Your Insurance Help You?

Commercial insurance policies are generally designed to cover all risk of loss or damage to the insured property. This can include business interruption, except as specifically excluded (i.e., metal roof exclusion). While there are different forms of business interruption coverage, the general purpose is to reimburse the policyholder. 

A common misconception among business owners is that business interruption clauses provide standalone coverage for anytime business is interrupted. However, policies more commonly provide business interruption coverage for losses resulted from covered property damage. So, if your property suffers a covered property loss, such as fire, and this results in you having to stop business operations, you may then pursue a business interruption claim. Keep in mind, though, that typically this means that the business owner must first prove covered property loss and then seek recovery for the business interruption loss. Fortunately, there have been instances where courts ruled for the policyholder in the determination of a covered property loss. In the end, there is hope for business interruption claims due to COVID-19. 

The Science Side

The Centers for Disease Control and Prevention has stated that the virus is thought to spread mainly from person-to-person contact. It has also been observed that a person can contract COVID-19 “by touching a surface or object that has the virus on it and then touching their own mouth, nose, or possibly their eyes.” [1] The University of California San Francisco has also stated that the principal mode of transmission is currently thought to be respiratory droplets. Close contact with an infectious person can also pass the virus along. This includes “shaking hands, or touching a doorknob, tabletop, or other surfaces touched by an infectious person” can also transmit the virus. [2] Finally, the New York Times has reported that a study of other coronaviruses found they could remain on metal, glass, and plastic for several days. [3]

The Law Side

So, we’ve looked at the science, now let’s look at the law. After reviewing cases such as Motorists Mutual Insurance Co. v. Hardinger and Gregory Packaging Inc. v. Travelers Property Casualty Co., it’s clear that the presence of microscopic organisms may constitute direct physical loss or damage and that loss or damage need not be visible to the naked eye, or visible at all. [4] [5] In addition, there already exist some, albeit rare, policies that include coverage for communicable disease response and for the business interruption that results from the communicable disease. [6] Finally, as declared by Mayor De Blassio of NYC and Mayor Cantrell of New Orleans in their orders, the novel coronavirus can cause damage to property which should then trigger business interruption clauses that do not contain an exclusion encompassing viruses. [7]

While these findings foster a hopeful future for business owners, as we mention, every policy has its differences. We encourage business owners to send us their policies at intake@mma- .com for a free consultation. Our attorneys will go over your potential coverage and discuss your exclusions to manage expectations and help you prepare for your future.

Potential Business Interruption Losses 

As COVID-19’s disruption continues to gain traction throughout the world, it may cause further action by local, state, and federal governments. We’ll review your policy for “civil or military authority” coverage, which can provide coverage for limiting, restricting, or prohibiting access to an insured location provided it meets certain provisions. We’ll also review your policy for “contingent business interruption”. This provides coverage when the loss of a primary supplier, partner, or customer affects your ability to do business.

How MMA Can Help Your Business 

You can submit your policy below! Our attorneys will provide you with customized advice for free. We encourage all of you to be proactive and use us as your tool to minimize the disruption and affects that coronavirus may cause.  

We pledge to #ProtectthePolicyHolder, #ProtecttheHomeowner and #ProtecttheBusinessOwner. Do not hesitate to contact MMA Law Firm for a FREE, no-obligation claim review with our experienced attorneys. 

For more information about McClenny Moseley and Associates and our services, give us a call at 844.662.7552 or send us an email at messages@mma- .com. 

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[4] 131 F. App’x 823, 824-27 (3d Cir. 2005).

[5] No. 2:12-cv-04418, 2014 WL 667 5934, at *6 (D.N.J. Nov. 25,2014).