Insurance Implications of Coronavirus: General Liability

Many organizations are still uncertain of the type of claims that they may see in the wake of the COVID-19 pandemic.  Moreover, there is fear as to whether the insurance company will cover and/or reject all claims made in connection to COVID-19 claims.  Whether your insurance company will cover a loss connected to the coronavirus depends on the language of your insurance contract as well as the type of claim. This article will address general liability insurance implications and COVID 19.

General Liability

Typically, a general liability policy provides that it will indemnify the policyholder for damages that they are legally obligated to pay as the result of an unintended or unexpected “occurrence.”  Occurrence, for insurance purposes, is an accident, including continuous or repeated exposure to substantially the same harmful condition.  In the midst of the coronavirus, a potential claim an organization might see is the failure to exercise and enforce reasonable care, provide precaution, provide a warning of the risk of coronavirus that causes third-party harm. For example, a guest/client alleges that they caught the coronavirus on your premises. 

Some may argue that the coronavirus infection is the result of a “continuous and repeated exposure” and therefore this claim should be covered.  Many general liability policies have attempted to exclude virus, bacteria by explaining that a “continuous or repeated exposure” refers to bodily injury and/or property damage that develops over time, such as asbestos claims as opposed to a “virus,” and or “ordinary disease of life.”  Remember, coverage determinations depend on specific facts and the language of the insurance policy. It is important that you continue to review your policy with a professional and continue with risk management precautions with respect to your clients and guests. Be prepared and implement effective safety practices for your workforce, volunteers, guests, and clients