Understanding Business Interruption Insurance
Your broker should be able explain your coverage benefits. The issuer of your policy or its agent should be able to do the same. Any of them may have a website that explains your business interruption benefits.
Business Interruption Coverage
Your business interruption insurance policy should list or describe the types of events it covers. Events that are not listed on, or not described in, the policy are typically not covered. It is important to review the policy exclusions, coverage limits, and applicable deductibles. You should also determine if the policy requires your business interruption to last for a certain time period before you are entitled to any policy benefits.
Business interruption coverage typically can only be triggered if you have property loss that leads to the business interruption. One example could be that a fire in your office has caused you to suspend your business activities.
Because coverage varies across policies, you will need to read your particular policy and consult your broker or insurer or its agent for more information.
Business Interruption FAQs
Multiple policies may have been structured to provide greater limits or broader coverage than what might have been available from one policy. You should contact your broker or insurer(s) or any related agent to obtain a full explanation of your total coverage.
It is possible to have business interruption coverage under another type of insurance policy. For example, there may be available coverage in policies that cover perils arising out of actions by civil authorities or interruption of your supply chain. Business interruption coverage may also be part of a package of multiple coverages that have been combined or are contained in a Special Multi-Peril or Business Owners policy.
You should contact your broker to obtain an explanation of related coverage in other types of policies you may hold. Any insurer or its agent whose policy you purchased should explain whether it provides business interruption coverage.
As explained above, business interruption coverage requires a related property damage. For a contingent business interruption insurance policy, that property damage can be on someone else’s property but causes your business interruption. One example could be that a fire in a building on your street has closed the street to traffic and prevented your employees from coming to the office.
As with regular business interruption insurance policies, coverage can vary and you should consult your broker or insurer or its agent.
It is unlikely that a current business interruption policy has contemplated the coronavirus specifically. However, you should check to see if your policy has an exclusion that would disable coverage for an incident triggered by an epidemic or pandemic, which might apply as the COVID-19 situation evolves. Also, any claim would still need to be related to your property damage for coverage to be triggered.
Insurers typically do not write coverage for events that have already occurred. In addition, authorized insurers may be reluctant to write insurance when the extent of potential damage is not easily understood, although it may be possible to insure specialty risks in the excess line market. You should discuss any potential insurance purchase with a licensed insurance producer.
As explained above, business interruption coverage requires a related property damage. Fear of COVID-19 alone is unlikely to trigger business interruption insurance coverage.
If you cannot find the answer to your question in our FAQs, call DFS at (800) 342-3736 Monday through Friday, 8:30 AM to 4:30 PM or send us an email.
New Yorkers with complaints about a business interruption insurance policy should file a complaint.