March 11, 2020

The Coronavirus Has Disrupted My Business. Does My Insurance Policy Cover My Financial Loss?

The Coronavirus Has Disrupted My Business. Does My Insurance Policy Cover My Financial Loss?

Jason W. Peterson is a Shareholder and a member of the firm’s General Litigation department.
Jason’s practice focuses on personal injury, wrongful death and catastrophic insurance claims.

PENSACOLA (March 11, 2020) –

COVID-19 is spreading and will impact businesses in the United States.  Whether the disruption is to your own workforce, or that of your customers or suppliers, either could lead to financial loss. Our clients have started to ask the question: Will my insurance policy cover my lost income?

Whether your insurance policies cover losses due to a disruption in your business depends on the terms and conditions of your insurance policy and the circumstances of the loss.  The threshold consideration is whether your business has purchased business interruption coverage.  However, the details of that coverage, and any exclusions associated with it, will determine whether your business has coverage for financial loss.

Business interruption coverage protects against financial losses to a business due to damage to property that is insured under the policy, so long as the damage is caused by a covered cause of loss such as fire or a hurricane. The coverage is typically for business losses caused directly or indirectly by the physical damage to the insured property, such as lost profits that occur before your business operations can resume to pre-loss status.  Your policy terms will define the method of business loss calculation and the length of time over which the lost income can be recovered.

Contingent business interruption coverage is a specialized insurance product that extends your coverage for your financial losses caused by interruption of your customer’s or supplier’s business.  This coverage is typically added to your policy by endorsement and has to be specifically requested and purchased.  The cause of the damage experienced by your customer or supplier must be a covered cause of loss under your policy.  Again, the specific terms and conditions of your contingent business interruption endorsement will control whether your policy pays for the loss.

Business interruption coverage is often provided with your business’s commercial property policy.  Usually, physical damage to the insured building is a threshold requirement to trigger business interruption coverage.  Business interruption alone is not enough.

Your policy may also include coverage for financial losses caused by a forced closure of your business or property by a Civil Authority.  This coverage applies when you are unable to access your property due to a government mandate issued because of physical damage to your property, or a neighboring property.  You must be able to establish a causal connection between the government order and the physical damage.

Finally, your policy contains specific causes of loss that are excluded from insurance coverage.  Indeed, loss caused by virus or disease may be excluded from your policy.  Often, coverage for this cause of loss will only be available by an endorsement to your policy.

If your building is rendered uninhabitable due to virus or disease, is it considered to have “physical damage?”  What happens if you need to shut down your business for a period of time to disinfect the premises?  Are these consequences of the COVID-19 virus specifically excluded under your policy?  These may be open questions that require legal analysis.

In summary, your insurance policy terms, conditions, and exclusions will determine if your financial losses caused by COVID-19 infection are covered under your policy.


Clark Partington’s insurance team is equipped to answer questions related to your specific situation. With offices in Pensacola, Destin, Santa Rosa Beach, Tallahassee, and Orange Beach (Alabama), we are a full-service firm, serving the Gulf Coast.  To reach one of Clark Partington’s insurance attorneys, contact Jason Peterson at (850) 436-6469 or

About Clark Partington:

Clark Partington is the largest business focused firm in the Florida panhandle with offices in Pensacola, Destin, Grayton Beach & Tallahassee.  The firm also maintains a presence in South Alabama with an Orange Beach office.  Since 1976 Clark Partington has grown to over forty lawyers and has served the people and businesses of Florida through an innovative and collaborative approach to practicing law.  Our lawyers are consistently recognized for their service to the profession and excellence in the courtroom.  More information about the firm’s practice, its attorneys, and recognitions may be found at