COVID-19 and Business Interruption Insurance

March 23, 2020

As companies of all size across the State of New York reel from the Coronavirus outbreak, business owners are looking for ways to mitigate their losses. One avenue that must be considered is availability of business interruption insurance.

On Friday, March 20, 2020, Governor Cuomo issued the “New York State on PAUSE Executive Order,” mandating the total closure of all “non-essential” businesses statewide effective at 8 p.m. on Sunday, March 22, 2020. With this mandatory closure order, there is a glimmer of hope for coverage under certain kinds of business interruption insurance policies. In particular, “civil authority” coverage provides business interruption insurance for losses resulting directly from the forced closure of property by the government, including the interruption or cessation of business activities. In addition, certain kinds of policies provide “contingent business interruption” coverage providing insurance for losses resulting from disruptions to a business’ suppliers or customers.

If you or your company has a business interruption policy, we would be happy to review it for you. As always, strict reporting deadlines may apply, particularly for so-called “claims made and reported policies.” If you would like Farrell Fritz, P.C. to review your policy, please feel free to contact Franklin C. McRoberts at fmcroberts@farrellfritz.com. Frank has extensive experience representing insureds analyzing, litigating, and resolving claims against insurers, brokers, and agents, including business interruption carriers.