According to the North Dakota Insurance Department, it’s unlikely.
Business owners in North Dakota are being told by their insurance companies that they do not have coverage for their COVID-19-related claims, yet many are still under the impression that this is exactly what their business disruption insurance is supposed to be used for. Because there has been so much confusion surrounding the topic, business owners are turning to the North Dakota Insurance Department for answers.
This is what the ND Insurance Department had to say.
In order for a business to successfully file a business disruption claim, a covered event (i.e. fire, storm, etc.) must have occurred that caused physical damage to the property. Because the insurance department believes that a pandemic is not considered physical damage,” it is unlikely that a business owner will find coverage through their business disruption insurance.
What About Civil Authority Coverage?
While many business owners took the initiative to not only purchase business interruption coverage but also civil authority coverage as a way to ensure their business was protected, the department also says that “this too is generally triggered by physical damage.” The North Dakota Insurance Department’s website goes on to explain that “standard policies usually contain an exclusion for viral pandemics or pandemics” such as COVID-19. “These exclusions arose in or around 2003, during the SARs outbreak and are traditionally maintained in the standard language of commercial insurance.”
If my business interruption insurance and civil authority coverage won’t pay for my COVID-19-related losses, will a commercial property policy cover a business’ losses brought on by the pandemic?
It may or may not as it all depends on how the wording in your policy is interpreted. However, the state’s insurance department does say that “business income policies reimburse an owner due to loss of income due to a suspension of operations.” The suspension “must be caused by direct physical loss of or damage to property at [the] premises which are described in the Declarations and for which a Business Income Limit of Insurance is shown in the Declarations.”
What if my business interruption policy doesn’t exclude viruses, bacteria, or pandemics?
Am I entitled to coverage?
If you think you are entitled to coverage for your COVID-19 losses, yet your insurer has informed you on several occasions that you do not have coverage, it might be time to direct your questions to a North Dakota insurance claims denial lawyer. An attorney can read through your policy and determine if your insurer is providing you with accurate information. If you would like to speak with a legal expert now, USAttorneys.com can place you in touch with some of the best insurance claims denial lawyers in North Dakota now.