COVID-19: Property Insurance and Business Interruption

For the latest information and resources on Coronavirus, please visit the RCM&D COVID-19 Resource Center at https://info.rcmd.com/covid19.

The coronavirus outbreak (COVID-19) brings about much concern and uncertainty.  Of particular concern may be the financial impact and economic consequences that may be imposed on businesses. 

We are in the early stages of the coronavirus pandemic.  It is a very fluid and ever-changing environment.  As a result, it is difficult to know what the full impact of these circumstances may present in time to come. With potential widespread illness and financial losses, questions are sure to arise concerning the possible role of insurance to mitigate the damages and/or to provide relief for such losses.  While insurance policies vary for each line of business, the coverage provided by each policy also differs.  There are exclusions in policies that may or may not address issues related to COVID-19.  Likewise, insurance carriers’ interpretation of coverage often differs as well.  At this time, we do not know what coverage decisions will be made by carriers in response to losses related to COVID-19, so we offer the following information as a general overview of the various insurance coverages and how they traditionally respond. But again, because states are now proposing legislative changes we cannot anticipate how these changes may impact your specific insurance coverage at this time.  


Property & Business Interruption

Typically, commercial property insurance policies require physical damage to insured property in order to trigger Business Interruption coverage.  Coverage MAY also be triggered if the interruption is due to orders from a civil authority. Even then, in most instances, the property policies require that the civil authority order results from physical damage to property.

According to a recent press release from the Maryland Insurance Administration,  "All insurance policies have exclusions of coverage for risks that are too great to be underwritten at an affordable price.  For example, commercial and personal property insurance policies typically contain specific exclusions for loss or damage caused by war, nuclear action and radiation.  The potential loss costs from such perils are so extreme that providing coverage would jeopardize the financial solvency of property insurers. Global pandemics like COVID-19 usually fall into this category." 

With all that said, because we are living in unusual times. The situation is fluid and each state could require the insurance companies to bend on this policy. Both legal and legislative actions are emerging across the US.


We are in unchartered territory in the United States and internationally. If you believe that you may have a claim, or circumstance that could lead to a claim, we continue to recommend that you report all claims or potential claims to their appropriate carriers per the instructions provided in your Claim Reporting Manuals. While there may be exclusions in your insurance policies that could apply, as circumstances continue to change, we are starting to see States proposing new legislation surrounding various exclusions. 

Be assured that RCM&D strives to advocate on behalf of every client.  When coverage is denied or disputed, our team will assist in evaluating the carrier’s position against the policy language.  Every effort is made in assisting our clients with negative coverage determinations.  We will continue in that regard as well to COVID-19 related claims.  Any valid and appropriate argument will be considered to advocate on behalf of our clients when coverage is disputed.

RCM&D is making every effort to anticipate our clients’ questions and concerns during these ever rapidly changing times.  If there are any questions, or if further assistance is needed with the claim process, please let us know.