Pub. 2 2019-2020 Issue 4

27 cover “all risks” of loss. As relates to COVID-19, it may be easier to obtain coverage under an “all risks” policy than one that covers specified causes of loss. If the dealership’s policy includes civil authority coverage, it may extend to loss of earnings and certain continuing expenses when a civil authority prohibits access to, ingress to or egress from the place of business because of a covered cause of loss, within a certain distance of the place of business and subject to certain time limits for when the coverage begins and ends. The policy may include extra expense coverage which generally covers extra expenses (e.g., cleaning/disinfecting expenses). Extra expense coverage may depend on whether the expenses result from direct loss or damage to covered property. Many policies include exclusions for viruses, pathogens, etc. Whether such exclusions apply, however, will depend on the precise policy language. Such exclusions may be the subject of legal challenge. Some argue that exclusions that do not explicitly refer to viruses should not be used to exclude or deny coverage. In a related challenge, a virus is also not a “pollutant,” “bacterium” or “fungi” for purposes of excluding coverage, and businesses might consider challenging exclusions or coverage denials under policies that do not specifically exclude “viruses” or “pathogens.” Whether the dealership is able to fully decipher the parameters of its coverages, policy provisions and exclusions, if the business reasonably believes it has a claim for coverage for losses sustained as a result of forced closure during the pandemic, it is important to provide prompt written notice of such claim to the insurer to avoid denial of coverage based on lack of timely notice. Businesses should consult with their agents and counsel regarding questions of coverage. More needs to be done in this area to protect businesses. Lawmakers in several states are considering requiring insurers to cover business interruption losses related to COVID-19 regardless of policy exclusions or physical loss requirements, including relief for businesses that had policies in place at the onset of the pandemic, with reimbursement incentives for insurance companies. 3 Julie A. Cardosi is an attorney and president of the private firm, Law Office of Julie A. Cardosi, P.C., of Springfield, Illinois. She has practiced law for nearly 35 years and represents the business interests of franchised new vehicle dealers. Formerly in- house legal counsel for IADA, she concentrates her practice in the areas of mergers and acquisitions and other transfers of dealer ownership, franchise law, commercial law, state and federal regulatory compliance matters, including employment, and other areas impacting day-to-day dealership business operations. She has also served as former Illinois Assistant Attorney General and Deputy Chief of the Consumer Fraud Bureau of the Attorney General’s Office. The material discussed in this article is for general information only, is not intended as legal advice and should not be acted upon as such. Dealers should consult their own private legal counsel for application to their specific circumstances. For more information, Julie can be reached at jcardosi@autocounsel.com, or at 217-787-9782, ext. 1.