To channel Mark Twain, the reports of the death of insurance for COVID-19 are greatly exaggerated. As lawyers advising policyholders on insurance for their COVID-19 losses, we have read many expositions that quote insurers and insurance brokers who assert that “coverage will not apply,” relying on the same unrealistic facts.
So what are the real facts? Courts have concluded that “contamination” and other similar facts may constitute “physical loss.” Many commercial insurance policies protecting businesses against loss of business income and cancellation of conferences and other events contain no exclusion for “virus.” Others contain contradictory provisions that, under the law, must be construed in favor of coverage. And, of course, the terms of a specific insurance policy or program govern.
The moral of this story: Policyholders should read their insurance policies carefully and not simply “take ‘no’ for an answer.”
The original letter can be found here.