In response to the COVID-19 (Coronavirus) outbreak, the Commonwealth of Pennsylvania has taken strict action in an effort to limit the spread of the virus. Among other things, Governor Tom Wolf ordered all non-life-sustaining companies and organizations to close their physical locations by March 19th. As a consequence, many businesses have suffered tremendous financial losses.
If you are a business owner, you may be wondering: Will COVID-19 losses be covered by my business interruption insurance? The answer is that it depends on the specific language of your policy—but you should be ready for the insurance company to fight your claim. Here, our Philadelphia business lawyers provide an overview of interruption coverage and Coronavirus.
Business Interruption Coverage: Defined
In the most simple terms, business interruption coverage provides protection against the losses that arise in the event that a company is forced to temporarily suspend operations. As an example, imagine that a severe thunderstorm causes serious damage to a Southeastern Pennsylvania restaurant. While a commercial property insurance policy would be needed to pay for the structural repairs, a business interruption policy could provide coverage for operating expenses (rent, payroll, etc.), lost profits, and other damages.
Policy Language Matters—Watch for Exclusions
As the Coronavirus outbreak has forced many companies in Pennsylvania to suspend physical operations, it is only natural that business owners and operators are reviewing their insurance coverage to assess their options. Unfortunately, there is no guarantee that your business interruption policy will cover COVID-19 related damages.
Coverage always depends on the specific terms of the policy—and some business interruption policies exclude certain types of losses. That being said, business owners should not assume your losses are excluded. As the Coronavirus outbreak is a complicated issue, it is recommended that you consult with a lawyer who can review your policy.
Pennsylvania Law: Business Interruption and Coronavirus
There is no specific statute in Pennsylvania that requires insurance companies to indemnify against virus or disease as part of their business interruption plans. In other words, an insurance company may explicitly exclude virus/disease related losses or it may write policy terms that result in no coverage.
There are legislators who are trying to reform the laws to adjust for the Coronavirus outbreak. As reported by The Philadelphia Inquirer, a New Jersey Assemblyman is currently pushing a bill in the state legislature that would require all insurance companies to cover COVID-19-related business interruption claims for small and mid-sized businesses (100 employees and less). Though it is unclear if this legislation will become law, it is important to keep a close eye on legal developments in New Jersey and in other states, including in Pennsylvania.
Contact Our Pennsylvania Business Interruption Lawyers for Immediate Assistance
At van der Veen, Hartshorn and Levin, our Pennsylvania business law attorneys can assist you with a business interruption claim. If you have questions about COVID-19 and your insurance coverage, we are available to help. To arrange a confidential, no strings attached initial consultation, please contact our legal team today. From our offices in Philadelphia and Allentown, we represent companies throughout Pennsylvania.