Business Closure Insurance (Contagious Disease Cover)
Business closure insurance covers loss of income resulting from an officially ordered closure or restriction of operations, particularly due to infection control measures.
Concept
Business closure insurance covers loss of income and additional costs incurred by a business when a competent authority fully or partially closes or restricts its operations due to infection control measures, particularly under the German Infection Protection Act.
Coverage Trigger
Unlike classic business interruption insurance, which requires a preceding physical damage, business closure insurance is triggered purely by an act of public authority, such as an order to close, a prohibition on operating, or quarantine of staff due to notifiable diseases or pathogens.
Relevance After the Covid-19 Pandemic
Business closure insurance received considerable public and legal attention during the Covid-19 pandemic, as numerous business closures resulted from general legal decrees, and it was intensely disputed between insurers and policyholders whether such pandemic-related, blanket closures were covered under older policy wordings; as a result, many wordings were subsequently clarified and supplemented with explicit pandemic clauses.