Because losses related to COVID-19 come in many forms, this is not an easy topic to address.
This is especially true since the terms of many insurance policies vary by insurance carrier, and even the lines of coverage with "standardized" terms often have key terms changed by endorsement that are available only to certain clients or certain industries. As such, there is no hard and fast rule as to whether any particular type of claim will be covered.
The only way to know if a policy will cover a claim is to review the terms and conditions of the particular policy with a knowledgeable insurance professional.
The following should not be relied upon as legal advice regarding how any specific insurance policy would respond in a specific situation.
Comprehensive General Liability Insurance (CGL)
Policies generally cover bodily injury and property damage caused to third parties on the insured premises. Allegations that an insured caused a guest, customer or third party harm by failing to exercise reasonable care in implementing, enforcing or warning of the risk of potential exposure to the corona virus could be covered by a CGL policy. To the extent that a guest, customer or third party alleged bodily injury as a result of an insured's negligence, we would expect to see coverage absent a specific exclusion.
Contingent Business Interruption Insurance (CBI)
CBI insurance generally provides coverage for an insured that suffers lost profits because a critical (and scheduled) supplier is unable to provide necessary supplies due to a covered peril. For those insureds that have purchased CBI insurance and have losses caused by a supplier being unable to provide necessary supplies, it may be easier to recover under a CBI policy than a BI policy. Again, the actual terms of the policy and the circumstances of the claim will be critical to understanding whether coverage is available.
Marine Cargo Insurance
Coverage for goods carried by sea is usually provided by a marine "open cargo" policy. Such coverage is typically for "all risks" of damage to or loss of the goods, i.e., physical damage to the cargo. Other non-physical risks, such as loss of market where the delivery of the cargo is delayed, are usually excluded. Thus, if a cargo of perishable goods were damaged because of a delay in delivery arising from the COVID-19 pandemic, then the typical open cargo policy would respond to the physical damage claim.
With the many novel issues raised by COVID-19 and so many variables in the potentially applicable insurance policies, insureds and insurers are well advised to consult with their insurance brokers and a knowledgeable insurance professional about their coverages.
BASED ON AN ADVISORY ISSUED BY HOLLAND AND KNIGHT