Source: San Francisco Chronicle
Most insurance companies are telling owners that business interruption policies do not cover shutdowns due to coronavirus. Some businesses have pushed back, filing lawsuits to bring the issue before the courts, the Chronicle reports.
Which side will win? Early analysis from legal scholars appears to favor the insurance industry. But a 30-year-old California Supreme Court ruling on groundwater contamination could give businesses a fighting chance to claim the coronavirus as an insurance-covered business interruption, the Chronicle added.
“Court decisions support the conclusion that actual or threatened coronavirus contamination, at or near insured property, constitutes physical loss or damage triggering business interruption coverage,” said Robert Wallan, co-chair of Pillsbury’s insurance recovery group. “Courts have widely held that contamination is a form of physical loss or damage if it impairs the use of the insured property.”
“In California, the 1990 ruling should provide coverage for businesses unless their policies expressly exclude insurance for harm caused by viruses, an exclusion that lowers the premiums they pay,” Wallan added.