If you own business Interruption insurance, and your business gets interrupted by COVID-19, the income you lose must be covered by your policy, right? Not exactly, as people across the country are now discovering.

Executive Summary

P/C insurance policies should be accompanied by plain language summaries—even if the underlying, indecipherable policy contract ultimately controls, writes Watermark Consulting's Jon Picoult, suggesting the problems insurers are facing today as unhappy business owners turn to the courts for coverage of COVID-related business interruptions could have been avoided.

Much to their surprise and chagrin, business owners are learning that business interruption insurance typically only pays out when there is physical damage to the covered property (such as when a restaurant has to close for an extended period after a fire guts the kitchen). Many policies even specifically exclude losses caused by, or resulting from, a virus.

Businesses are lawyering up to fight for what they feel they’re owed, after years of paying insurance premiums and now expecting compensation when they’re at their most vulnerable. Insurers are similarly girding for a fight, as they highlight all of the fine print in their policy documents that supposedly justifies denial of COVID-19 business interruption claims.

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