The insurance industry is bracing itself for the large number of
claims arising out of the novel coronavirus pandemic. Depending on
the coverage form involved, insurers should have strong coverage
defenses to most of these claims.
Standard commercial property forms were never designed to cover
pandemic-related losses. And after the SARS pandemic, standard
property forms were tightened to expressly restrict coverage for
viruses and communicable or infectious diseases.1 Nevertheless,
policyholders facing billion-dollar losses from mass shutdowns and
business disruptions will first reach for coverage where it is
unlikely to exist—their commercial property policies and,
specifically, their business interruption, contingent business
interruption, and civil authority coverages.
