Business interruption coverage (which may also be referred to as time element, business income, or gross earnings insurance) generally covers losses to your business’s income as a direct result of an interruption of your business. Ordinarily, the interruption must be caused by physical loss or damage to your property by a “covered peril” as discussed above. The presence, or the suspected or feared presence, of COVID-19 generally will not mean that property has suffered “physical loss or damage” under your policy. Typically, “physical loss or damage” means that the physical structure or physical characteristics of the property have been altered as a result of the “covered peril.” Loss of use, loss of access, or the diminished value of property that has not been physically altered will typically not be considered “physical loss or damage.”

Your business interruption or time element coverages may be subject to other requirements set forth in the policy. The policy will pay a loss, up to the limit or sublimit of liability in the policy, when such loss is greater than the deductible and/or waiting period. A “waiting period” usually consists of a set period of consecutive hours or days immediately after physical loss or damage occurs. Waiting periods can vary by location and type of business interruption insurance. The business interruption coverages may be limited to coverage for a set number of days or period of time and/or to a specific sublimit of liability. Any applicable time periods or sublimits will be set forth in your policy.

Most commercial property insurance policies include coverage for certain business interruption losses, as discussed in these FAQs. It is possible that your insurance does not provide business interruption coverage and you should review your policy for its specific coverages or contact your broker if you have questions about your policy.

Under most circumstances, in order for business interruption coverage to be provided under your policy, you must have experienced physical loss or damage by a covered cause of loss, which may also be referred to as a “covered peril.” “Covered perils” include risks of physical loss or damage (e.g., fire), unless excluded.

Your policy has exclusions for certain causes of loss, including exclusions that may apply to COVID-19. Such exclusions may include, but are not limited to, contamination, microorganism, disease, and/or virus exclusions. Please review the exclusions in your policy carefully to see if any are applicable. Even if no such exclusion is contained in your policy, there would not be any coverage unless you can demonstrate that COVID-19 actually caused physical loss or damage to the specified type of property, as applicable.

There is no coverage for loss or damage caused directly or indirectly by any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease. While coverage is provided for the actual loss of business income you sustain due to the necessary suspension of your operations during the period of restoration, the suspension must be caused by direct physical loss or damage to property at the described premises and must be caused by or result from a Covered Cause of Loss, as defined in your policy. Unless otherwise noted, coverage is provided for business income losses that occur within 12 consecutive months from the date of direct physical loss or damage and commences 72-hours after the related loss or damage.

Policies issued by Starr Insurance almost always include exclusions, limitations, reductions, and other provisions that limit policyholders’ ability to make a claim against their policies. Your policy may contain exclusions that apply to COVID-19. Please consult your insurance policy to determine if COVID-19-related claims are excluded or contact your broker with any questions.

These FAQs do not form a part of your insurance contract. No coverage is provided by this these FAQs, nor can they be construed to replace or modify any provisions of your policy, including its endorsements. If there is any conflict between these FAQs and your policy and/or its endorsements, the policy and/or its endorsements will control. Coverage for a specific claim can be determined only after a loss has occurred and the facts particular to that claim are known, so that such facts may be applied to the terms, conditions, limitations, and exclusions of your policy.

* Starr Insurance (or Starr) is the worldwide marketing name for the operating insurance and travel assistance companies and subsidiaries of Starr International Company, Inc. and for the investment business of C. V. Starr & Co., Inc. and its subsidiaries. Starr Indemnity & Liability Company, Starr Specialty Insurance Company, and Starr Surplus Lines Insurance Company are insurance carriers domiciled within the United States and members of Starr Insurance.