{"id":64471,"date":"2025-02-02T14:46:13","date_gmt":"2025-02-02T14:46:13","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/insurance\/time-element-ensurance-coverage-to-consider-in-light-of-covid-19\/"},"modified":"2025-02-02T14:46:13","modified_gmt":"2025-02-02T14:46:13","slug":"time-element-ensurance-coverage-to-consider-in-light-of-covid-19","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=64471","title":{"rendered":"Time Element Ensurance Coverage to Consider In Light of COVID-19"},"content":{"rendered":"


\n<\/p>\n

\n

By Alex L. Brockmeyer, Esq. and Justin M. Thomas, Esq. <\/h4>\n

The onset of the recently declared pandemic, COVID-19,
\nhas injected great turmoil into everyday life and has disrupted business as
\nusual for companies and organizations, without prejudice to size or net worth.
\nThe impact on businesses has been and will be devastating for many. <\/p>\n

One question raised is whether insurance covers any of
\nthe losses associated with COVID-19. The answer, as we are sure all readers
\nwill be thrilled to hear is: it depends. Like most questions concerning
\ninsurance coverage, the answer depends on the language in your insurance
\npolicy.<\/p>\n

There are a minimum of three insurance products that
\nmight cover losses associated with COVID-19: (1) commercial property policies;
\n(2) builders risk policies; and (3) pollution policies. This article will focus
\non the first two insurance policies.<\/p>\n

Commercial
\nProperty Policies<\/strong><\/p>\n

Commercial property policies traditionally cover \u201cbusiness
\ninterruption\u201d or \u201cbusiness income\u201d losses. To trigger coverage under a
\ncommercial property policy, a business must prove \u201cdirect physical loss or
\ndamage\u201d to the covered property caused the loss of income or business
\ninterruption. At the outset, proving COVID-19 actually existed in the covered
\nproperty will be difficult. Some local municipalities, like Broward County,
\nhave issued shutdown orders that state COVID-19 is physically damaging
\nproperty. Orders like Broward County\u2019s can assist businesses in satisfying the
\ncoverage grant of their commercial property policy.<\/p>\n

Another avenue of recover under commercial property
\npolicies is the \u201ccivil authority\u201d coverage. \u201cCivil Authority\u201d coverage provides
\ncoverage for, among other things, loss of business income caused by a
\ngovernment order the limits access to the covered property. \u201cCivil Authority\u201d
\ncoverage may be temporally limited. Governor DeSantis\u2019 April 1, 2020, Executive
\nOrder Number 20-91 (\u201cShut Down Order\u201d) should provide businesses a basis to
\nmake a \u201cCivil Authority\u201d claim.<\/p>\n

However, getting through the coverage grant of the
\n\u201cbusiness interruption,\u201d \u201cbusiness income,\u201d or \u201cCivil Authority\u201d portion of
\nyour policy does not end the battle. Most insurance companies will attempt to
\ndeny the claim based on either a \u201cpollution\u201d or \u201cvirus and bacteria\u201d exclusion.
\nOf these, the \u201cvirus and bacteria\u201d exclusion presents the most obvious impediment
\nto coverage because COVID-19 is a virus. Don\u2019t let this deter you from making a
\nclaim. Not all commercial property policies have a \u201cvirus and bacteria\u201d
\nexclusion. <\/p>\n

Even if your policy has a virus and bacteria exclusion,
\nyou should still make a claim. Why? There are many reasons. But this article
\nwill focus on two insurance products. First, insurance companies must notify
\ntheir insured of a material change to the coverage afforded by their policy.
\nFailure to provide such notification can result in the striking of that particular
\nexclusion from the policy. Point being, if an insurance company insured you for
\nconsecutive years and a prior policy did not have a \u201cvirus and bacteria\u201d
\nexclusion, you may be able to get the exclusion struck from the policy. <\/p>\n

Second, in getting the \u201cvirus and bacteria\u201d exclusion
\napproved, insurance companies may have misrepresented to insurance regulators
\nthe purpose of the \u201cvirus and bacteria\u201d exclusion. The insurance industry put
\nthe \u201cvirus and bacteria\u201d exclusion into effect in 2006 after the Severe Acute
\nRespiratory Syndrome (\u201cSARS\u201d) epidemic. Typically, an insurance company must
\nget approval from the Florida Department of Insurance before changing its
\npolicy form. The Insurance Services Office, Inc. (\u201cISO\u201d) circular, which was
\nlikely presented to the Florida Department of Insurance to enable insurance
\ncompanies to add the \u201cvirus and bacteria\u201d exclusion to the commercial property
\npolicy, indicates the \u201cvirus and bacteria\u201d exclusion is needed to clarify a
\ncommercial property policy does not cover losses associated with a virus or
\nbacteria. That, however, is simply not true. By 2006, courts repeatedly found
\ncoverage under a commercial property policy for losses caused by:<\/p>\n

    \n
  1. E-Coli bacteria;<\/li>\n
  2. Radioactive dust;<\/li>\n
  3. Noxious air
    \nparticles;<\/li>\n
  4. Asbestos;<\/li>\n
  5. Mold and mildew; and<\/li>\n
  6. Pesticides and other
    \nvaporized chemicals.<\/li>\n<\/ol>\n

    The potential misrepresentation made by
    \ninsurance companies to the Florida Department of Insurance could enable
    \nbusinesses to prevent insurance companies using the \u201cvirus and bacteria\u201d exclusion
    \nto deny the claim.<\/p>\n

    Builders
    \nRisk Policies<\/strong><\/p>\n

    Similar to commercial property policies,
    \nbuilders risk policies require evidence of physical loss or damage to trigger
    \ncoverage. This analysis is the same as the analysis for commercial property
    \npolicies. Moreover, like commercial property policies, builders risk policies
    \nusually have some form \u201cCivil Authority,\u201d or \u201cdelay in completion\u201d coverage.
    \n\u201cCivil Authority\u201d or \u201cdelay in completion\u201d coverage may depend on the existence
    \nof a physical loss or damage. Coverage under a \u201cCivil Authority\u201d or \u201cdelay in
    \ncompletion\u201d provision may be easier to attain in light of the Shut Down Order
    \nbecause the Shut Down Order has impacted some sectors of the construction
    \nindustry. <\/p>\n

    Like the foregoing effort to prove
    \ncoverage under a commercial property policy, satisfying the coverage grant of a
    \nbuilders risk policy is only half the battle. Insureds will still encounter
    \ninsurance companies seeking to deny claims based on various exclusions. Aside
    \nfrom the \u201cvirus and bacteria\u201d or \u201cpollution\u201d exclusions, most builders risk
    \npolicies contain some sort of \u201cabandonment of work\u201d or \u201ccessation of work\u201d
    \nexclusion. At bottom, these exclusions apply if a contractor abandons a project
    \nor stops work for a long period. In presenting a claim under a builders risk
    \npolicy, an insured should emphasize that it is not abandoning the project and
    \nintends to resume work as soon as the COVID-19 restrictions lift.<\/p>\n

    When reporting the claim, make sure to
    \nreport any increase constructions costs. Additionally, document any other
    \ndamages. Insureds should be prepared to present documentation to support their
    \nclaim.<\/p>\n

    Conclusion<\/strong><\/p>\n

    Coverage under a commercial property or
    \nbuilders risk policy is not a given. That said, obtaining coverage is also not
    \nimpossible. If an insured has a potential claim because of COVID-19, it should
    \nnotify its insurer. Placing the insurance company on notice of a claim
    \npreserves the insured\u2019s rights. Finally, do not let an initial denial
    \ndiscourage you. Insurance companies are receiving a large volume of claims and
    \nwill issue unjustified denials in hopes of discouraging insureds from
    \ncontinuing forward with the claim. Keep fighting and work with your risk
    \nmanagement team.<\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":"

    By Alex L. Brockmeyer, Esq. and Justin M. Thomas, Esq. The onset of the recently declared pandemic, COVID-19, has injected great turmoil into everyday life and has disrupted business as usual for companies and organizations, without prejudice to size or net worth. The impact on businesses has been and will be devastating for many. One […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[94],"tags":[13841,13547,27300,35013,556,1231],"dealstore":[],"offerexpiration":[],"class_list":["post-64471","post","type-post","status-publish","format-standard","hentry","category-insurance","tag-coverage","tag-covid19","tag-element","tag-ensurance","tag-light","tag-time"],"yoast_head":"\nTime Element Ensurance Coverage to Consider In Light of COVID-19 - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=64471\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Time Element Ensurance Coverage to Consider In Light of COVID-19 - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"By Alex L. Brockmeyer, Esq. and Justin M. Thomas, Esq. The onset of the recently declared pandemic, COVID-19, has injected great turmoil into everyday life and has disrupted business as usual for companies and organizations, without prejudice to size or net worth. The impact on businesses has been and will be devastating for many. 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