COVID-19 And Business Interruption Claims

Coverage under a typical insurance policy for business interruption is initiated by the insured sustaining a loss caused by "direct physical loss or damage to buildings, equipment or stock".   Despite the substantial economic damage that COVID-19 continues to cause, the standard business interruption policy will not assist in lessening the losses sustained by Canadian corporations.  In most situations, an insured will not be able to demonstrate that the virus has caused physical loss or damage to buildings, equipment or stock.

Although COVID-19 itself may not directly trigger business interruption coverage, some insurance policies will include an endorsement protecting against interruption by a civil authority.  With various provincial governments essentially banning certain businesses from operating, those entities may be able to pursue a claim for coverage under this section of their policy.  The indemnity available under civil authority interruption coverage is