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As COVID-19 becomes more widespread, there is understandably great concern and numerous questions from our clients regarding how their insurance coverages may respond.  Unfortunately, not all policies contain the same wording and each coverage must be evaluated individually.  In addition, the details of each claim may differ markedly so each must be considered on its own merit.

There is obviously a great deal of loss exposure with respect to the COVID-19 virus.  There is so much at stake and strong differences of opinion as to whether insurance applies to a specific situation.  As such, even the most straightforward sounding wording is likely to be tested in court.

Most of the coverage questions we have received relate to Business Income, General Liability and Workers’ Compensation coverages.  Below are the likely issues, as indicated by several commercial insurance carriers.


Before Business Income coverage responds, there must be damage to property caused by a Covered Cause of Loss, leading to the suspension of operations of the business.  Most policies contain a specific exclusion for viruses that would apply in the case of COVID-19.  Consult your agent for coverages in your specific policy.


While General Liability coverage is intended to provide a defense and pay damages for Bodily Injury arising from the insured’s operations (if caused by an “accident”), it will certainly be difficult to determine where a particular claimant may have been infected.  Should an action be brought against a business, the burden of proof would be on the plaintiff to prove that their infection was the result of the business’s premises or conduct.  Additionally, some policies have a policy exclusion for communicable diseases. Note also that the definition of what is an “accident” differs greatly in different states.  Again, coverage will be evaluated on a case by case basis. 

Whether or not insurance coverage applies to a lawsuit, a business should do everything possible to minimize the likelihood that it will be considered negligent in a COVID-19 case.  For example, precautions such as limiting employee travel, self-quarantining as appropriate, mandating sanitary practices such as handwashing, the use of hand sanitizer, regularly cleaning and disinfecting areas where a customer may visit, keeping employees from the general public (social distancing), etc. would be prudent.


Two tests must be satisfied before any illness or disease, including COVID-19 qualifies as occupational and compensable under Workers’ Comp:

  1. It must have arisen in the course and scope of employment; and
  2. It must be caused by conditions peculiar to the work

#2 is paramount.  For example, a parent taking care of a sick child may go to work and begin to show symptoms on the job.  His resulting illness would likely not be compensable as it was not caused by conditions of his work.  A nurse, however, who contracts the virus while taking care of an infected patient, would likely be considered to have a compensable claim.

The COVID-19 virus will bring about many challenges for the remainder of 2020 (and quite possibly beyond).  The Earl Bacon Agency will work with our clients on their claims challenges and advocate on your behalf.  Please contact us should you have a potential claim involving this virus.