As owners, contractors and suppliers struggle with the COVID-19 pandemic, they will undoubtedly ask, as they should, if the impacts are covered by insurance. Given the types of policies (property insurance, builders risk insurance, commercial general liability, pollution liability, business interruption, etc.), the innumerable potential endorsements and exclusions, the specific facts of each case, and the applicable state law, it is neither wise nor useful to attempt specific, concrete assertions. In other words, whether there is coverage for losses related to Covid-19 can be a complex analysis which is fact-specific, policy-specific and state-specific. There are, however, general principles which are helpful to keep in mind when evaluating your coverage. To some, these principles may seem rather simple and unremarkable – and indeed they are; but application of these easily overlooked principles can yield coverage where it otherwise may not seem to exist.
1. The words used when communicating with an insurer regarding a claim are absolutely critical. It is a fundamental truth that identical facts presented in different fashions can in the one case result in coverage, and in the other case the denial of coverage. Thus, with the exception of straightforward issues when you simply turn over a matter to your insurer, one must have a thorough grasp of coverages and exclusions in communicating with an insurer in order to present a covered loss and avoid making an assertion with unintended, and potentially disastrous, consequences. This is particularly true when dealing with new and unusual issues such as the current pandemic.
2. All policies are not the same, and there are often differing interpretations of the same language. Consequently, non-specific information such as you might find on the internet should be considered for what it is – general information. The information may in fact be inapplicable to your situation, or simply wrong. In the same vein, different policies may have different definitions of the same word, so once again, one person’s assertion regarding the definition of a word may be incorrect in your case. For example, some policies define “pollutants” as including biological contaminants, while others do not. As one can imagine, when it comes to COVID-19 this difference can be quite significant.
3. Insurance policies are generally construed in favor of the insured, and some states are more insurer friendly than others. Thus, if you can reasonably interpret the policy to provide coverage, then it probably exists.
4. When in doubt, submit a claim. This seemingly obvious point is surprisingly ignored at times. On numerous occasions I have taken over a case only to find that no one ever submitted the matter to the insurer. We then do so and the insurer steps in – much to the financial benefit of the insured. Moreover, on a number of occasions we have submitted a claim even though we did not believe there was a duty to defend or provide coverage, and then the insurer unexpectedly picked up the defense. Especially for smaller companies, submitting even doubtful claims can be the difference between the company flourishing or perishing, so it is absolutely worth doing. Not surprisingly, some insurance companies are already proactively telling insureds that COVID-19 related issues are not covered by existing policies. Given the novel nature of this pandemic and the lack of legal precedent, you should nonetheless work with your legal counsel and agent and submit a claim. Doing so will preserve your rights.
5. Use your agent. A good agent is quite literally worth their weight in gold – not only on the front end in making sure you are adequately protected, but also in assisting you in dealing with the insurer and finding coverage.
Navigating the nuances of coverage in light of your specific case can be challenging indeed, but of course the upside can be tremendous. At Campbell & Bissell we would be pleased to assist you in that regard, so do not hesitate to call if you have any questions.
By: Mike Bissell