Will Your Property Insurance Policy Cover COVID-19 Losses?
Property insurance policy is one of the most widely known insurance policies in the market. One thing you must understand is that property insurance is not just one simple policy. It is in fact a broad term for a series of policies which provide coverage for the property itself. Moreover, it also provides liability coverage for property owners. If there is damage to the property, or a theft on property premises, the policy provides reimbursement to the policy holder.
Homeowner’s insurance, earthquake insurance, flood insurance and renter’s insurance are few examples of policies which can be included in it. The property insurance policy is designed to reimburse policyholder for actual value of damages or the replacement cost to fix the problem.
How has Corona-virus Affected the People?
Corona-virus pandemic has hit the world very hard. However, none have suffered as much as the United States. The government has been forced to take some stringent measures to curb the spread as much as possible. This includes closing down all the markets and economic centers. Businesses are suffering and workers are sitting at home wondering when this nightmare will end. Yet, there are some safety measures which can provide hope in such dark time. Insurances, such as property insurance policy, workers’ compensation and business interruption policies can provide a lot of coverage.
How Does Property Insurance Policy Help in Corona-virus?
Typically, a property insurance policy is placed on an all risk basis. The agreements within the policy are designed to provide coverage in all cases of physical loss or damage. The physical damage from a threat must occur to the property of the insured policy holder, not excluded. The burden pf proving the need to identify an exclusion to the cause of loss falls solely on the insurer.
An organization or a policyholder might claim to the presence of the COVID-19 virus in its insured facility. However, it might not establish a direct physical loss trigger specified in the policy. There are several exclusions in the policy that a carrier may use to exclude coverage for this purpose.
There are many policies which contain exclusions for contamination or biological agent. A virus, such as COVID-19 would fall under this exclusion principle in such a case. Moreover, the policy carrier could also point out the delay, loss of use or loss of market exclusions. It is unfortunate that most insurance companies exclude the introduction of a virus as a peril in their policy forms. Yet, there are some company forms and manuscripts policies which contain affirmative coverage for a communicable disease. The clauses for industry verticals, such as hospitality are one such example. These clauses provide coverage for the communicable disease as write backs in policy form. This kind of coverage extension in a property insurance policy is sub-limited and in aggregate.
What is the Importance of Triggers?
The physical loss or damage trigger in this insurance policy must be satisfied. Only them a policyholder be able to obtain time element coverage or business interruption coverage. It might be determined that the actual presence of a virus is counted as physical damage. However, indemnity period would only be the time needed to disinfect and clean up the contaminant. There might be a possibility of getting an extension in period of liability.
The time limit extensions in property insurance policy deal with civil or military authority and contingent time element. However, both these coverage extensions physical loss of damage to the insured from a peril, not excluded. Moreover, carriers often look to the same exclusion point in preceding paragraph.
Every loss scenario and policy are unique in a property insurance policy. Each of them should be reviewed in detail to determine their applicability.
Providing Top Quality Property Insurance Policies
SG Financial Inc. is the best insurance carrier in Dallas, Texas area to provide you an excellent property insurance policy. Our policy is customizable and you can adjust the riders, clauses etc. to suit your own needs.