In late 2019, a new strain of coronavirus, severe acute respiratory syndrome–associated coronavirus 2 (SARS-CoV-2), known as COVID-19, first emerged in Wuhan, China, and quickly began spreading around the globe. By January 2020, COVID-19 had reached the United States, displacing the promise of a new decade and recently minted New Year’s resolutions.
COVID-19 has wrought unprecedented devastation, both in terms of human lives lost and economic impact. The death toll worldwide has surpassed 728,000 individuals, while the death toll in the United States alone has surpassed 160,000 individuals. The federal government declared a public health emergency on January 31, 2020. State and local governments have also declared public health emergencies. Attempting to slow the spread of COVID-19, stay-at-home orders signed by governors nationwide have become commonplace. Those orders frequently require nonessential businesses to shut down, causing economic disruption on a scale not seen since the Great Depression.
Faced with unprecedented economic challenges, policyholders have sought business interruption coverage—often referred to as time element coverage—under their commercial property insurance policies. Commercial property insurance policies, however, require direct physical loss or damage to property as a prerequisite for coverage, and some policies contain exclusions that specifically exclude losses caused by viruses and other microorganisms.