In an article published by the Georgia Bar Journal, Don Boyle and Greg Schultz discuss first-party coverage for business interruption losses, including sources of business interruption coverage; how losses arising out of coronavirus potentially are covered; expected arguments against coverage by insurers; and policyholder responses to insurers' arguments, with an emphasis on Georgia law.
Business owners who have had to cease operations and suffered a loss of income due to public concerns over COVID-19 understandably have inquired about the availability of insurance coverage.
"These questions remain largely unanswered, although we know that several significant contractual impediments to coverage are likely to exist," said the authors.
Business interruption insurance is a type of "time element" coverage. It provides coverage for the period of time that the insured is unable to use the covered property. It can be stand-alone insurance, or more often is a coverage offered under a typical property and casualty insurance policy.
The authors explained that, "Although every policy should be reviewed carefully, insurers will seek to enforce typical business interruption policy requirements and exclusions, such as the requirement of a “direct physical loss,” the 2006 ISO exclusion for viruses and the Absolute Pollution Exclusion."