• Local First Springfield

Does your business interruption policy have a pandemic exclusion?

By Ben Sgro

Sgro, Hanrahan, Durr & Rabin, LLP


The economic engine of Illinois came to a grinding halt at 9:00 p.m. on March 16, 2020. While some businesses were deemed essential, the majority of small business was forced to shutter its doors for an undisclosed period of time. Almost seven months later heavy restrictions remain in place as to the way in which operation is permitted.


Many of you, as small business owners, purchased a policy of Business Interruption coverage though your insurance carrier, which is intended to protect your livelihood in the event that you are unable to conduct business for any number of reasons. Any attempt to file a claim under such coverage, however, has been met by insurance with a quick and definitive denial.


While some policies contain a “virus exclusion” or “pandemic exclusion,” the vast majority of claims are denied for lack of physical loss. It is important to understand that the concept of physical loss is currently being hotly debated across the country. Illinois’ courts have found noxious fumes, asbestos, and other contaminates to constitute a physical loss, which provides validity to the theory that a viral pandemic is a physical loss as well. Furthermore, many policies provide coverage in the event that business is forced to cease by Order of Civil Authority. Clearly, that is the case with any business prohibited from operating during the pandemic.


Sgro, Hanrahan, Durr & Rabin is a local firm that has been a part of this community for almost 40 years. We have partnered with other firms in the pursuit of recovery on a large-scale for businesses that have been denied coverage under a policy that was sold to protect them in this very instance.


If your insurance company has denied your Business Interruption claim for losses during the pandemic, call Ben Sgro with Sgro, Hanrahan, Durr & Rabin, LLP at (217) 789-1200.

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