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1 1 (March 31, 2020)

handle is hein.crs/govctyr0001 and id is 1 raw text is: Researh Sevice Business Interruption Insurance and COVID-19 March 31, 2020 The economic disruption from the COVID- 19 pandemic has led businesses and policymakers to ask whether insurance should cover associated losses. The loss of income from mandatory or voluntary closures, supply chain disruptions, and reduced demand due to social distancing measures may induce businesses of all sizes to seek compensation from insurers. Commercial Property Insurance Most businesses carry commercial property insurance, including coverage for damage to their building and contents due to a covered cause, such as a fire or windstorm. Such insurance may also cover loss of income resulting from property damage (see Business Interruption Insurance below). Viruses and infectious diseases are generally not designated perils in a standard policy, although all-risks coverage might include COVID-19. Following previous health crises, many policies now contain explicit exclusions for virus or bacterial losses. In 2006, the Insurance Services Office (ISO) introduced an exclusion for loss due to virus or bacteria that applies to property damage to buildings or personal property and endorsements that cover business income, extra expense, or action of civil authority. This language excludes coverage for loss or damage resulting from any virus or microorganism that induces physical distress, illness, or disease. Physical Loss or Damage Requirement Property insurance policies typically require direct physical loss or damage to tangible property. For policies without an exclusion for viruses, the determination of coverage related to the coronavirus may turn on the definition of physical damage. When a business remains habitable but has been closed as part of a mandatory or voluntary closure to protect against contamination, it has probably not suffered a direct physical loss. If a property has become physically contaminated and uninhabitable due to coronavirus, there may be a basis to claim that a direct physical loss has occurred. Some orders shutting businesses, such as that issued by the Mayor of New York, have specifically cited property damage from COVID-19 as one of the underlying reasons for shutdowns. In addition, there is some case law that supports an Congressional Research Service https://crsreports.congress.gov IN11295 CRS NStGHT Prepaimed for Mernbei-s and Committees o.i C- --q .. . . . . . . . ...-----------------------------------------------------------------------------------------------------------------------------------------------------------------------

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