In recent weeks, there has been a flood of general advice from brokers, insurance lawyers and others opining that there may – or may not – be insurance coverage for coronavirus losses under various types of insurance policies for business interruption or other losses and liabilities. What you may not know is that specific provisions buried in a 100+ page insurance contract may provide coverage you did not realize you had. Slight nuances in policy language or applicable law are important and should be analyzed by experienced coverage counsel. The pandemic is causing substantial business losses in a variety of ways that may not have been contemplated before, which should also be carefully analyzed. The details not only matter, they may mean the difference between keeping your business afloat and financial catastrophe.

Business interruption coverage, for example, may be available from a variety of policy provisions that vary greatly from insured to insured and industry to industry. For example, we have seen commercial property policies containing multiple avenues of business interruption coverage for these losses, such as coverage for loss resulting from infectious disease, and broadened “civil authority” provisions that extend coverage for a restriction of access in the vicinity of the insured location, whether or not there was property damage as defined in the policy. We also have seen contagious disease endorsements that cover property damage as a result of the existence of a contagious disease, as well as provisions covering business interruption loss if the insured limited access to the properties in anticipation of the disease, even without an order of civil authority.

Even if your policies do not have express provisions like these, there are differences in policy language, law and state regulation. “Property damage” may include circumstances, like viral exposure or contamination, that preclude or limit occupancy. Policyholders and their advisors also need to examine “sue and labor”/”preservation of property” clauses, as some provide coverage for expenses incurred in response to an imminent threat of damage. Covered property damage may also result during the process of mandatory shut down.

In addition, the responses of various states are evolving in real time. The New York State Department of Financial Services is requiring commercial property insurers to publicly declare their coverage positions on business interruption coverage, which could result in pressure to provide such coverage, but may also contain overly general and misleading statements of coverage. New Jersey is considering legislation to compel insurers to provide coverage even if they have a virus exclusion in the policy.

These types of hidden gems may also exist in your business’ general liability, errors and omissions, event cancellation, builders’ risk, and directors’ and officers’ coverage.

The bottom line is this: these are extraordinary times and you should not make any assumptions about your coverage. Details matter. Expertise matters. Let us know if we can help.

Photo of John Failla John Failla

John Edward Failla is a partner in the Insurance Recovery & Counseling Group. With more than twenty years of experience focusing on insurance recovery for business policyholders, John has the practical and legal experience to assist clients in managing business risks and solving…

John Edward Failla is a partner in the Insurance Recovery & Counseling Group. With more than twenty years of experience focusing on insurance recovery for business policyholders, John has the practical and legal experience to assist clients in managing business risks and solving business problems.

John has helped clients recover more than a billion dollars from their insurers through litigation, alternative dispute resolution or negotiation in some of the most significant insurance matters involving a wide range of issues.

Photo of Marc Eric Rosenthal Marc Eric Rosenthal

Marc E. Rosenthal is a partner in the Insurance Recovery & Counseling Group. He has significant experience as a litigator and corporate adviser who focuses on issues of insurance and reinsurance. Marc is listed in Chambers USA, in which he is described as…

Marc E. Rosenthal is a partner in the Insurance Recovery & Counseling Group. He has significant experience as a litigator and corporate adviser who focuses on issues of insurance and reinsurance. Marc is listed in Chambers USA, in which he is described as, “key to bringing closure to many important negotiated settlements. He is quick to understand the positions and to recommend innovative ways to achieve resolution, and he follows this up with prompt and effective agreement preparation.”

Marc represents clients in insurance coverage matters involving first party, third party, D&O, environmental, toxic tort, business interruption, advertising injury, general liability, and professional E&O coverage; reinsurance arbitration; commercial litigation; mediation; negotiation; coverage analysis; and claims counsel.

Photo of Nathan Lander Nathan Lander

Nathan Lander is a partner in the Insurance Recovery & Counseling Group who represents clients in high-stakes disputes with their insurance companies as well as counseling them regarding a wide array of insurance issues.  Clients have praised Nate in Chambers and The Legal

Nathan Lander is a partner in the Insurance Recovery & Counseling Group who represents clients in high-stakes disputes with their insurance companies as well as counseling them regarding a wide array of insurance issues.  Clients have praised Nate in Chambers and The Legal 500 as “having extensive knowledge regarding insurance coverage issues,” providing “sound strategic advice in navigating difficult coverage disputes, and litigation strategy,” and being “responsive, knowledgeable and creative,” a “zealous advocate” and “absolutely amazing to work with.”

Nate is an experienced litigator and trial attorney. He represents policyholder clients – including Fortune 500 companies, asset managers, and professional sports teams, among others –in litigations, arbitrations and mediations with their insurance carriers. During the course of his career, Nate has assisted clients in recovering more than $1 billion in disputes with their carriers.

Nate also previously served as a Public Service Attorney for the Manhattan Tort Division in the Office of the Corporation Counsel of the City of New York. In that position, he was lead trial counsel in numerous cases brought against the City of New York in Supreme Court, New York County, as well as in Kings County. He defended the city as lead trial counsel in a variety of cases, ranging from allegations of negligence by city employees to allegations of police misconduct.

In addition to his litigation practice, Nate frequently advises clients on risk management issues, including structuring of insurance programs and the negotiation and drafting of policy language. Nate also advises clients on insurance-related issues in the context of various corporate transactions. Although Nate counsels clients in all industries, he has particular experience advising clients in the asset management space, including private equity firms, hedge funds, registered funds, and venture capital firms.

Photo of Elise Yablonski Elise Yablonski

Elise A. Yablonski is a versatile litigator with trial and appellate experience in a wide variety of legal contexts, including business torts, trade secrets and unfair competition, professional malpractice, insurance recovery and fiduciary litigation. Her recent pro bono experience includes litigation under the…

Elise A. Yablonski is a versatile litigator with trial and appellate experience in a wide variety of legal contexts, including business torts, trade secrets and unfair competition, professional malpractice, insurance recovery and fiduciary litigation. Her recent pro bono experience includes litigation under the Hague Convention on the civil aspects of international child abduction.

Elise authored Chapter 40, titled “Trial Preliminaries and the Opening Statement,” for the third and fourth editions of Robert L. Haig’s treatise entitled Commercial Litigation in New York State Courts.