“Stay at home” or “shelter in place” orders have swept the nation, with over 30 states and numerous counties and cities issuing orders requiring citizens to stay indoors, limiting travel, and forcing businesses to close in an effort to slow the spread of COVID-19. For many businesses, the novel coronavirus has severely interrupted their operations and supply chains and may continue to do so given recent government orders extending shut downs and other restrictions through the end of April 2020. Even industries deemed “critical infrastructure” by the Department of Homeland Security in the CISA Guidelines that remain open are encountering disruptions to supply chains, construction, customers and labor. It is already evident that impacted businesses will be turning to insurance carriers to indemnify damages and lost revenues as a result of these orders.

Not surprisingly, the first wave of litigation has focused on the hospitality industry. A number of restaurants, closed by government orders in light of the COVID-19 pandemic, have sued their carriers seeking insurance for the losses caused by the orders and the resultant closures. One would expect similar disputes to arise in other industries, such as construction, energy, retail, and product manufacturing. For now, businesses are coping on a day-by-day basis but, as claims arise up and down the supply chain, interpreting and applying business insurance policies, whether underwritten for comprehensive general liability or specifically for business interruption, will come into play in the calculus of allocating losses in the business world.

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