Business Interruption Insurance

The coronavirus pandemic has caused a global economic crisis. Businesses in the United States and around the world have been impacted – many forced to shut down temporarily.

Sporting events, travel, event planning, concerts, and the hospitality industries, just to name a few, have been hit hard by the COVID-19 virus.  Additionally, service and manufacturing companies are all dealing with the impact this virus has caused. 

In Wisconsin, and other states many business owners are concerned as to whether they will survive, and their employees are worried they may lose their jobs. 

However, the good news is that many Wisconsin businesses have business interruption insurance policies, but very few ever collect on it. The insurance industry doesn’t give the information to a business owner on how to collect on this type of coverage and how to make a claim.

Additionally, after some of the past infectious diseases have ravaged the economy, many insurance carriers cut back on those types of coverages that they offered for pandemics and have put new language in their policies or enlarged their exclusions.  They also have enacted strict sub-limits to minimize their exposure. 

It’s important to note that there are still areas of coverage that do exist and you should have a professional assess the type of insurance coverage you have in place that may address your lost profits and cash flow. 

What About Covid-19 and My Business Interruption Insurance in Wisconsin? 

Many businesses in Wisconsin may already have business interruption insurance built into their first-party property insurance or as a separate insurance policy. 

Generally speaking, business interruption insurance protects you against losses that may occur when the operations of your business may be suspended due to certain types of property damage.

While most insurance companies claim that contagious diseases are not considered to be property damage, there may still be coverage in your policy.  For example, if your real property became contaminated, and/or there was a real fear that your property could become contaminated, this may meet the property damage definition in your insurance policy. 

It may be that your heating and cooling system is contaminated – this would amount to property damage. If your Wisconsin business property became contaminated you would more than likely be forced to shut down, and your business interruption insurance could kick in, but there are limitations. These limitations include:

  1. In Wisconsin and elsewhere, some insurance companies have started to add exclusions for viral and/or bacterial infections into their policies. The attorneys at the Groth Law Firm in Milwaukee, Wisconsin have been both exclusions. The language in these policies is what’s most important and while your policy may have an exclusion for pandemics, you may still have Covid-19 coverage. 
  2. Your Wisconsin insurance company may argue that their normal pollution exclusion prevents you from recovering your damages. However, there’s a question as to whether a virus or bacteria is a pollutant, and there aren’t any hard and fast rules that apply in that situation. 
  3. You may also have coverage based upon where you are located and if the authorities have restricted access to your business. In this case, even if there isn’t any damage to your business property, you may still have coverage. You must have a Wisconsin attorney review your policy and know your circumstances to collect the benefits of your coverage. 

What About Covid-19 and My Supply Chain Insurance in Wisconsin? 

Supply chain insurance is purchased based upon the type of Wisconsin business you operate. Supply chain or Contingent Business Interruption insurance is there to protect your business and yourself against losses that may occur due to your supply chain being interrupted in some way. 

In broad terms, these types of insurance policies exist to protect your business against any interruption of raw materials, supplies, and/or parts.

A Contingent Business Interruption insurance policy will generally cover any economic losses that could include local and/or reduced operations, and increased costs due to any physical damage to your suppliers’ premises. 

Additionally, there are some supply chain and Contingent Business Interruption insurance policies in Wisconsin that may cover any loss of service to your place of business such as a loss of utility service. 

A supply chain insurance policy, in general, will cover:

  1. Any loss that occurs from disruption from specific suppliers that are scheduled in your policy; and
  2. Your supply chain insurance could require that your supplier had to have suffered a type of property damage that would be covered by your first-party insurance policy. In this case, actual contamination would have had to occur.

What About Covid-19 and My Event Cancellation Insurance in Wisconsin? 

Many companies in Milwaukee and throughout Wisconsin have a specialized form of event cancellation insurance coverage. This type of insurance policy normally exists in the sports, entertainment, and event planning industries. 

Your event cancellation policy should be written so it includes specific coverage against cancellation due to infectious diseases. This would include Covid-19.

The experienced and knowledgeable policyholder counseling and recovery attorneys at The Groth Law Firm in Milwaukee, Wisconsin know that some insurance companies have begun the process of inserting language in the form of endorsements that exclude coronavirus in their event planning insurance policies. However, if your event planning insurance policy was written before 2019 it’s highly unlikely to have this exclusion. 

If you have express coverage for infectious disease cancellations, you need to check your policy to make sure a Covid-19 exclusion hasn’t been inserted into your policy without your consent. 

What About Covid-19 and My Workers’ Compensation Insurance?

In Wisconsin and most other states, your workers’ compensation insurance should cover any of your employees that suffered an injury to illness while they were working. Most coverage is based on “work-related” injuries and the insurance company will look at such things as what time the injury occurred, the place it occurred, and the specific activity of the worker at the time the injury occurred.

As an example, if a doctor becomes infected with Covid-19 while working, they may have a valid claim for coverage. 

In conclusion, the best time to plan for any exposure to an infectious disease such as the coronavirus is before it takes place. You should assess your risks and assess your insurance coverage before you need to use it. 

The skilled and knowledgeable policyholder counseling and recovery attorneys at The Groth Law Firm in Milwaukee, Wisconsin are ready to help you with any of your business interruption needs.

Get in touch with us today to get started with your FREE case review. We’re only a call, click, or short drive away.