We are now months into stay-at-home orders and the unprecedented world of an international pandemic, and businesses are suffering substantial losses related to the COVID-19 pandemic, many of them closing. Many of the restrictions that state governments have placed on business operations are still in place, with some likely to remain in place for longer. The number and type of affected businesses span across industries.
To recover for losses, businesses have looked to their insurance policies and business interruption or civil authority provisions to pay for losses and are filing insurance claims. And, yet, as the weeks and months have passed, insurers have denied claims, asserting that business interruption insurance was not intended to cover interruptions arising from the type of closures in this pandemic, often on the basis that there is no property loss or damage that triggers coverage.  In response, a growing number of policyholders have filed suit challenging insurance denials—both individually and collectively through class actions—while certain state legislatures and the federal government have begun considering legislative solutions to address these insurance disputes and coverage during this emergency generally. 
The onslaught of information about insurance coverage for COVID-19-related losses can be both confusing and discouraging. Knowing that many businesses have filed suit against their insurance companies that have denied coverage has only added to the confusion. To help address this confusion, this article provides an overview of how claims for insurance might proceed, focusing on how policyholders are approaching their claims and asserting property loss and damage, and how some courts are starting to rule. While exclusions, such as virus exclusions, may come into play, we do not address those here. Ultimately, a policyholder must evaluate its own insurance policy, the specific closure orders affecting its business and its various losses, and, if not done already, file a claim if there is any potential for coverage. The sections below provide a road map for evaluating various insurance coverage issues.