Insurance Commissioners Issue BI Bulletins
Various state insurance commissioners have issued documents regarding business interruption coverage. The Arkansas Insurance Department’s Bulletin No. 9-2020 explained that in business interruption policies, coverage is triggered only when the policyholder sustains “physical damage to insured property caused by a covered peril resulting in a quantifiable business interruption loss,” and “virus and disease are typically not an insured peril unless added by endorsement.”
Similar bulletins were issued by Georgia Insurance Commissioner John F. King, Kansas Insurance Commissioner Vicki Schmidt, and West Virginia Insurance Commissioner James A. Dodrill.
The Maryland Insurance Administration clarified that business interruption 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. In a letter to business owners, North Carolina Insurance Commissioner Mike Causey indicated that “standard business interruption policies are not designed to provide coverage for viruses, diseases, or pandemic-related losses because of the magnitude of the potential losses.”