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Most insurance companies have excluded pandemics from their policies, so you cannot get your business disruption insurance to cover your losses from the Coronavirus. Since that is the case, when the first Coronavirus lawsuit was filed recently in Louisiana, they took the stance that the virus caused physical damage to the property. This case is likely going to set the precedence on how other Coronavirus lawsuits will be handled.

This virus is so dangerous that the government has ordered businesses that are not considered “essential” to shut down, and everyone is supposed to be cooped up in their house if they do not have to do something that is considered necessary. The Coronavirus lingers on surfaces for about 48 hours, and anyone else who contacts it in that time is exposed; this had led to the thoughts that this is damaging the property. “If the non-dangerous teenage pranks of ‘egging’ or ‘TPing’ a house are acts of vandalism and property damage, the dangerous virus on my business property certainly is property damage.”

Problems with Claims

One difficult part of calling this property damage is that you need evidence that it has damaged your property. This means you have to have regular testing on your site to prove the presence of the virus. Without some sort of evidence that the virus has indeed damaged your property, your insurance claim may get denied instantly.

There is some speculation that since COVID-19 is a pandemic, not merely a communicable disease that is specifically listed in policy language, there may be some leeway in getting insurance to cover it that way.

There has also been speculation that the Coronavirus counts under the “Act of God” defense for insurance coverage, which “usually covers unforeseeable natural phenomena like floods, fires, earthquakes, and other natural disasters, as well as businesses that were affected in the aftermath of 9/11.” This clause is complicated and can be difficult to use.

Political Pressure

Politicians have been putting pressure on insurance companies to cover this, leaving them scrambling, not wanting to have to pay out what could end up being a crippling sum of money by the end of this. There is a growing outcry in Washington of people who have paid hundreds of thousands of dollars to their insurance companies over the years who are now being told their business disruption insurance will not cover their losses.

“Business owners everywhere — not just restaurants — are flabbergasted that they’ve been paying on a timely basis thinking they’re covered if something bad happens only to find out it’s not the case,” said Jason Berry, co-founder of Washington-based KNEAD Hospitality + Design. Berry himself has been paying $100,000 per year to his insurance company for his restaurants, and his insurance denied his claim in four days.


Currently, we are looking at a lot of unknown factors where insurance and the Coronavirus are concerned. There are certain angles to attempt in an insurance claim for business losses, and with political pressure mounting, insurance companies may be forced to pay out for business losses and disruptions as a result of the virus.



Fantozzi, Joanna. “Here’s What Your Restaurant Business Insurance May (or May Not) Cover during the Coronavirus Pandemic.” Nation’s Restaurant News, 26 Mar. 2020,

Merlin, Chip. “Corona Virus and Physical Damage-The Louisiana Case Law That Will Be Relied Upon in the First Coronavirus Case Filed: Property Insurance Coverage Law Blog: Merlin Law Group.” Property Insurance Coverage Law Blog, 22 Mar. 2020,

Sams, Jim. “Restaurant Suit Tests Business Interruption Insurance for Coronavirus Shutdowns.” Insurance Journal, 19 Mar. 2020,

Warmbrodt, Zachary. “Insurers Scramble to Avoid 9/11-Style Coronavirus Backlash.” POLITICO, 26 Mar. 2020,

“Will Business Disruption Insurance Cover Losses from the Coronavirus?” United Claims Specialists, 20 Mar. 2020,