As the COVID-19 pandemic spreads across the globe, companies are experiencing unprecedented business interruption losses as they cancel events, curtail travel, and shutter retail establishments in compliance with government mandates and shelter-in-place orders. While some jurisdictions have only social distancing warnings in place, many organizations have voluntarily cancelled events and closed stores to reduce transmission of the novel coronavirus, SARS-CoV-2. The NBA, SXSW, Apple, and Nordstrom are high-profile examples. Supply chains are disrupted, as manufacturers close facilities, cancel orders and postpone shipments. Yesterday, the International Olympic Committee announced the postponement of the 2020 Tokyo Games until 2021.
With the economy screeching to a halt, companies are exploring options for mitigating losses, safeguarding business continuity, and avoiding liability to others during this period of extraordinary uncertainty. This post provides a high-level overview of the commercial insurance policies that may provide some protection against the myriad losses sustained by corporate policyholders due to the pandemic. As always, the specific terms of the company’s policies govern the applicability of the coverage to any particular scenario. And policyholders should be aware that legislative mandates and widespread coverage litigation may ultimately impact the scope of coverage for COVID-19 losses.