While Californians stay home to reduce the risk of transmission of COVID-19, businesses are starting to grapple with income loss. In commercial insurance, a policy with business interruption (BI) can cover lost profits, rent, utilities and clean-up costs. It less often provides transition expenses and payroll. About 30% of small businesses (less than 50 employees) have BI coverage.
Understandably business owners are asking questions about business interruption insurance, particularly if they are covered during the stay at home order. However, typical BI coverage is only triggered by physical damage to a property and covers the period to repair the damage.
BI covers physical damage because it is temporary and repairable. Viruses, such as COVID-19, are not insurable because they are enduring and incurable.
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