Answering your insurance questions regarding COVID-19

In an effort to answer some of your insurance questions, I have shown below how your insurance coverages may respond.  Unfortunately, most policies have specific exclusions listed on the policy that exclude coverage for this coronavirus pandemic.  There are informative links regarding Workers Compensation, and your state unemployment websites at the end of this email.  We hope this will help address any issues you may have on the Workers Compensation or unemployment insurance.


BUSINESS INTERRUPTION INSURANCE – Typical insurance markets already have restricted coverage for pandemic diseases, including coronavirus, through exclusions and sub-limited coverage.  Further, most policies limit or exclude coverage for civil authority orders relating to the coronavirus.

Business Interruption insurance protects against losses sustained due to your operation being shut down as a result of property damage.  Most policies typically require that there be direct physical loss of or damage to the insured property.  Contagious diseases do not constitute property damage and most business losses will likely be the result of a general decline in economic activity and not physical loss or damage to a structure.

However, contamination in HVAC systems has been held to constitute such property damage.  If actual contamination of property forces your business to shut down, business interruption may respond.  It is important to note that not all policies will respond.  With the SARS epidemic, many insurance carriers added specific exclusions to their coverage.

COMPREHENSIVE GENERAL LIABILITY INSURANCE (CGL) – As an owner, you face the risk of liability for failing to protect others from exposure to infection on the premises.    Your General Liability policy covers bodily injury and property damage and will usually provide legal defense costs against such claim.   HOWEVER, many CGL policies contain a Fungi or Bacteria exclusion.  While it is often called the Mold exclusion, it is more than that.  The endorsement typically also excludes coverage for “bodily injury” “which would not have occurred, in whole or in part, but for the actual, alleged or threatened inhalation of, ingestion of, contact with, exposure to, existence of, or presence of, any bacteria on or within a building or structure.”

WORKERS COMPENSATION (WC) – covers your employees who suffer injury or illness contract in the workplace.  Any claims for injury must allege “work-related” losses.  Providers of health care, transportation, hospitality services or retail establishments may be vulnerable.  It would be advisable to make a prompt, careful record of the time, place and circumstances of the exposure.  The Employers Liability portion of the WC policy may provide coverage in some instances.  For further reading:

OTHER – Beyond these policies would be your Employment Practices Liability (EPLI) policy that may cover defense for discrimination, Directors and Officers Liability may cover litigation by shareholders, and Pollution Legal Liability policies depending on the wording and facts of the claim.  However, most policies require physical damage to trigger the coverage, and most policies contain contamination exclusions.

As your insurance agent, we are not claims adjusters or attorneys.  We do not have the authority to make a determination on coverage.  If you wish to report the loss and file a claim, the insurance carrier will review your exact circumstances and make a determination based on your individual policy.

We are here to help and assist you with all of your insurance and financial needs.  You and your family are critically important to us.  We will continue to engage and provide you with the necessary resources to maintain our high standards.


Connie E Phillips, CIC, LUTCF, EBP, CIRMS