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What is business interruption insurance?

Most businesses carry commercial property insurance, including coverage for damage to their building and contents due to a covered cause, such as a fire or flood. Those insurance policies may also include business interruption insurance which covers business losses directly or indirectly caused by a temporary suspension in business operations on either a partial or complete basis due to a catastrophic event or peril. Generally, this is not a stand-alone policy but is an addition to a commercial property insurance policy.

For most businesses, business interruption insurance covers “net income” that would have been earned or incurred and continuing normal operating expenses incurred, including payroll.

Does my policy include coverage for Covid-19?

Many insurance policies do not provide coverage for outbreaks of disease. Most policies are either vaguely worded or include no such language at all. Some include coverage for “interruption by communicable disease.” However, the language may still exclude contaminations due to viruses like COVID-19.

A detailed review of your policy is required to determine what your policy covers.

It is important to note that the Ohio legislature recently introduced House Bill 589, which would require insurers to retroactively include virus transmission as a covered peril in business interruption policies. It is written to apply to businesses within the state of Ohio, that employ 100 or fewer employees, and are covered by a business interruption policy. Our lawyers are closely monitoring the status of this bill to determine its future applicability to Ohio businesses.

What if my policy includes a civil authority clause?

A civil authority clause is an insurance policy provision where coverage is triggered when a government entity denies access to the insured’s property. This may trigger coverage where government officials have issued a stay-at-home order and the temporary suspension of non-essential businesses. Future litigation and guidance are expected on this issue.

What qualifies as “loss?”

To trigger coverage, property insurance policies typically require direct physical loss or damage to tangible property that results in a slowdown or shutdown of business operations and an actual loss. For policies without an exclusion for viruses like Covid-19, physical damage may be required.

If a business remains habitable but has been closed as part of a mandatory or voluntary closure to protect against contamination, it has probably not suffered a direct physical loss. However, if a property has become physically contaminated and uninhabitable due to coronavirus, there may be a claim for physical loss.

In Ohio, a bridal store filed a class action lawsuit challenging the refusal of its insurance company to provide coverage under its business income and extra expense policy. Plaintiffs challenge the denial of their claims for losses suffered due to Covid-19. Plaintiffs seek declaratory judgment that the losses incurred in connection with the interruption of their business due to Covid-19 are covered under their policies and that the defendant is obligated to pay for the full amount of losses incurred. Our lawyers are closely monitoring this litigation to determine what impact, if any, this may have on Ohio businesses.

Is there a deadline by which I need to file my claim?

Some policies require filing a claim within a certain window such as 60, 90, or 180 days. That timeframe begins as of the date of damage. It is important to contact your insurance agent or carrier to determine the timeline that applies to your business.

What documentation is required for my claim?

Generally, documentation is required to substantiate loss of sales, customers, extra expenses, and hard costs. Documentation of sales trends and business cycles before and after the event may also be important.

What can I do today to obtain this coverage?

  1. Request a complete copy of your insurance policy from your insurance provider.
  2. Review your policy with legal counsel to determine potential coverage.
  3. Mitigate losses to the extent possible.
  4. Contact your insurance adjuster regarding your claim, expected timelines, and processes required to file your claim.
  5. Prepare the documentation that may be required to substantiate your claim.


Our lawyers are closely monitoring the latest developments and guidance from government and public health authorities and have the skill and experience to guide your business through this difficult and uncertain time.

Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice.