Insurance policies are unique documents drafted in a style that one does not use in normal, everyday conversation or writing. Not that the terms are necessarily complex, although there is an element of that, to be sure. Most insurance policies are written with broad grants of coverage for loss caused by specified risks or perils. This is typically a very short section of the policy. The balance of the policy, sometimes 10, 20 or 30 times the length of the coverage provision, is exclusions and limitations.
The bulk of the typical policy is devoted to limiting and narrowing the coverage.
A thorough review of any policy is the vital first step in assessing a valid business interruption claim. Each policy is unique, and a thorough understanding of terms of the insurance policy is a key role of a business interruption claim attorney. The general framework I employ in establishing coverage is to demonstrate:
- Specified loss or damage
- Occasioned by a covered cause of loss, risk or peril
- That is not excluded or limited
Even though each policy is singular, there are commonly used templates in the insurance industry. Insurance Services Office Inc. (ISO) is “an organization that collects statistical data, promulgates rating information, develops standard policy forms, and files information with state regulators on behalf of insurance companies that purchase its services.” The CP 00 30 Business Income (and Extra Expense) Form is the most widely used template, and an examination of its language is a useful example in determining if the there might be coverage under your policy for a coronavirus/COVID-19 business interruption claim.
"We will pay for the actual loss of Business Income you sustain due to the necessary "suspension" of your "operations" during the "period of restoration". The "suspension" must be caused by direct physical loss of or damage to property at premises which are described in the Declarations and for which a Business Income Limit Of Insurance is shown in the Declarations. The loss or damage must be caused by or result from a Covered Cause of Loss.
A. Covered Causes Of Loss When Special is shown in the Declarations, Covered Causes of Loss means Risks Of Direct Physical Loss unless the loss is: 1. Excluded in Section B., Exclusions; or 2. Limited in Section C., Limitations; that follow."
Source: CP 00 30 10 12 © Insurance Services Office, Inc., 2011.
This standardized language follows the general pattern of all insurance policies. A grant of compensation for a specific loss [i.e. "coverage], and then a series of limitations and exclusions on that coverage. Insurance companies routinely deny claims where the is a clear loss of income or property, contending that although there is a loss, it is not covered under the policy. Insurers employ some of Maryland's most talented and effective business interruption claim attorneys to represent their interests. If you insurance company has denied your coronavirus/COVID-19 loss of business income claim, your remedy is to pursue a breach of contract action against that insurance company in court.