COVID-19 and “Business Interruption” Insurance Coverage – What you Need to Know
As the COVID-19 crisis unfolds, businesses are looking to insurers to bear the risk of unprecedented financial losses.
In a previous Torkin Manes article, we canvassed some of the key factors clients are considering in deciding whether to present a claim for “Business Interruption” coverage. This type of coverage is typically triggered only when a business experiences a loss of revenue or increased operational expenses resulting from tangible “physical” damage to the business’ insured property.
Despite the traditional understanding of “physical damage”, the unprecedented nature of the economic crisis brought about by COVID-19 could encourage governments or the Courts to take steps to broaden the circumstances in which a business may be entitled to interruption coverage.
A recent decision of the Ontario Superior Court, MDS Inc. v. Factory Mutual Insurance Company, 2020 ONSC 1924, may influence this outcome, though this is far from certain.