Say What?

SAY WHAT? Direct Physical Loss Required To Trigger Most Business Interruption Claims C ommercial property policies also typically require “direct physical loss” to the property and proof of causation. In the event of a claim for coronavirus-related business interruption, questions may arise as to whether this “physical loss” requirement has been met. In particular, in circumstances where a business has been closed as part of a mandatory or voluntary closure − but is otherwise still habitable and uncontaminated − it has probably not suffered a direct physical loss since infectious diseases arising from humanto-human transmission generally will not qualify as property damage.” Attorney Paul S. White of Wilson Elser law firm in a report on commercial insurance. the Covoid-19 virus and potential business interruption claims. More Here

NY Introduces Bill To Force Insurers To Cover Business Interruption Resulting From Coronavirus N otwithstanding any provisions of law, rule or regulation to the contrary, every policy of insurance insuring against loss or damage to property, which includes the loss of use and occupancy and business interruption, shall be construed to include among the covered perils under that policy, coverage for business interruption during a period of a declared state of emergency due to the coronavirus disease 2019 (COVID-19) pandemic.” From a bill introduced into the Yew York Assembly by members Robert Carroll and Patricia Fahy on March 27th with an intent to force commercial P&C insurers to cover business interruption losses resulting from the coronavirus - even though policy wording requiring “direct physical loss” prior to being considered a valid claim is a condition unmet. Watch for other states to follow suit, including Ohio, Massachusetts and New Jersey. The Industry was not happy. Read below:

Insurance Industry Rejects B road business communities will be ultimately harmed by these kinds of proposals in that they may prevent potential financial assistance from anticipated relief programs, and will have a deep chilling effect on the availability of insurance for the business community moving forward. [The bill is] a dangerous, unprecedented,

and unconstitutional proposal that NAMIC emphatically opposes. Broad business communities will be ultimately harmed by these kinds of proposals in that they may prevent potential financial assistance from anticipated relief programs, and will have a deep chilling effect on the availability of insurance for the business community moving forward. Insurers pay millions of dollars annually to business owners who are impacted by tornadoes, hurricanes and other disaster losses. We’re now coming into tornado and hurricane season. How are we going to pay for the losses from these disasters that are covered if we don’t have the financial ability?”

Erin Collins, vice president, state affairs at the Indianapolis-based National Association of Mutual Insurers, in an email.