The Maryland Insurance Administration Says that Global Pandemics are Typically Excluded in Business Interruption Policies

But that doesn’t necessarily mean all business interruption policies contain this exclusion.

After the Maryland Insurance Administration (MIA) received a significant amount of inquiries regarding business interruption insurance amid the COVID-19 outbreak, an advisory was released that addressed many of the questions business owners have been asking. Before highlighting some of the key points that were discussed in the advisory, it is important to remember that every business owners’ policy is different which means some of the information shared below may not be applicable to you.

When can a business owner in Maryland use their interruption insurance to cover a loss?

The Maryland Insurance Administration states that “coverage is typically triggered under a commercial insurance policy when a covered risk/peril causes physical damage to the insured premises resulting in the need to shut down business operations.” For instance, if a fire broke out causing your business to have to close temporarily for repairs to be made, you could file a claim with your insurer to cover the losses you suffered (up to your policy limits) during the time you were closed.

Business owners may also be eligible to use their business interruption insurance when their business is shut down due to an order by civil authority (given they have coverage). The MIA does say that “the policy still typically requires a physical loss from a covered peril as the underlying cause of the business shut down to apply.”

Is there a waiting period before coverage begins?

Yes, the Maryland Insurance Administration says that “there is a waiting period of 24 to 72 hours before coverage begins and coverage continues for the reasonable period of time to restore the property and reopen, subject to the coverage limit of liability.”

Why are insurance companies denying business interruption claims?

The MIA states that “all insurance policies have exclusions of coverage for risks that are too great to be underwritten at an affordable price.” The MIA says that global pandemics typically fall into this category. The agency explains that “the potential loss costs from such perils are so extreme that providing coverage would jeopardize the financial solvency of property insurers.”

What should I do if my insurer denied by business interruption claim for COVID-19 losses?

You should hire a Maryland insurance claims attorney who can interpret your policy and determine if your insurer should be covering your COVID-19 losses. Most insurers are denying business interruption insurance claims filed for COVID-19 losses without first considering the terms set forth in a business owner’s policy. While some business owners may not be entitled to coverage, there may be some that are. To determine if your insurer in Maryland should be covering your COVID-19 claim, contact USAttorneys.com and let us connect you with a MD insurance claims attorney in your who is prepared to help you.