By now, even those not in the insurance industry are familiar with the concept of business interruption coverage. It certainly took center stage with the onset of the pandemic and the interruption it caused to many business operations and the consequential income loss suffered as a result. Not everyone, however, is familiar with the different elements of business interruption coverage available on property insurance policies.
Although fairly standard on property insurance policies, civil authority, ingress/egress, and extended period of indemnity are not automatically included. In fact, what prompted this post is a property policy I just took a glance at to ensure that a tenant was complying with the insurance terms in a lease, and noticed those coverages were all excluded. Lest one think this is a nominal premium policy and/or the insured does not have the exposure, it is actually a sizable premium policy and the insured is a manufacturer with multiple manufacturing warehouse locations that would likely suffer an interruption in operations if one of those locations would be inaccessible as a result of a civil authority or ingress/egress covered claim. Given the fact that those elements of coverage typically don’t have additional premiums associated with them, it is somewhat peculiar to observe its absence on a policy of this nature. One would expect someone to pick up on its omission. Nevertheless, it goes to show of the importance of not taking any coverage for granted and the need to check that all available elements of coverage, no matter how obvious they may be, are included in a policy.