The stay-at-home order has put many of Minnesota’s small businesses on the verge of bankruptcy. Most were either allowed limited options for business activity, like take-out service for restaurants, or were completely closed. This has caused many business owners to look at a myriad of other options to make up for lost income, including their own insurance policies.
Some business owners have “business interruption insurance” which replaces business income that was lost due to misfortunes such as fire, hurricanes, tornadoes and other natural disasters. This type of insurance policy may provide coverage for the Covid-19 pandemic.
Also, some insurance policies may have provisions concerning such matters as force majeure, acts of God, and all risks, which may allow the owner to collect damages for the loss of income due to Covid-19 pandemic and the ensuing stay-at-home orders. Force majeure and acts of God clauses basically cover the same type of acts – those events that were outside the control of anyone and were unforeseeable. These events include calamities caused by fires, hurricanes, tornadoes, and possibly pandemics.
All risks insurance provides coverage for events that the insurance policy doesn’t explicitly exclude. So, if the policy specifically does not exclude coverage for losses caused by tornadoes, then the business is covered for damages caused by a tornado.
The bottom line is that a business owner who has suffered losses due to the Covid-19 pandemic should review their insurance policies to see if they coverage for their business losses.