COVID-19 has a growing impact on the construction industry. Contractors and property owners are asking; “Is COVID-19 covered by Builder’s Risk?” Currently, at least 41 states, several cities and counties have issued “stay at home” orders to curb the spread of COVID-19. In the US, the disease has claimed over 14,000 lives so far. About 430,000 people have tested positive.
The stay at home order requires that residents stay indoors except to conduct “essential” activities. These include, going to buy food and seeking medical treatment. People who work in essential businesses, such as pharmacies, grocery stores, and banks, are exempt from the order.
There’s no universal federal ruling on the matter yet. So, states and cities have varying stands. In California, Governor Gavin Newsom’s stay at home order for all Californians, and exempted certain construction workers. The order stated; “Construction workers who support the construction, operation, inspection, and maintenance of construction sites and construction projects (including housing construction),” could continue to work.
The situation is changing daily. However, Pennsylvania has become the first and currently the only state to completely shut down construction. Governor Tom Wolf ordered work on non-life-sustaining businesses to halt. This included operations on construction sites. So, whether your project can continue depends on your state, city, or county.
Given the restrictions imposed on people and businesses globally, even construction projects allowed to continue will be indirectly affected. Contractors will have to contend with tight deadlines. There is a shortage of skilled labor due to quarantine requirements. There are supply chain disruptions. The question then becomes, is COVID-19 covered by Builder’s Risk?
Builder’s Risk insurance protects buildings and structures under construction or renovation, with most policies covering:
You can also purchase extensions or endorsements to your Builder’s Risk for :
However, to trigger coverage, most policies require “direct physical loss or damage.” Therefore, the key to coverage for a COVID-19-related business interruption claim will be, whether the presence or threat of the virus constitutes physical loss or damage.
There may be endorsements incorporated into your policy that exclude coverage for non-structural or invisible damage, (e.g., from bacteria, odors, and viruses). However, in this case, the policy will deny COVID-19-related claims. To know if your policy covers COVID-19-related business losses, contact your insurance provider immediately.
Is COVID-19 covered by Builder’s Risk Insurance? It depends on your specific policy’s language and endorsements. These can either broaden or limit coverage. The best course of action is to contact us to examine your policy. We are experts in construction insurance and can clarify your situation. Call Builder’s Risk today at 8879600221.