During the COVID-19 Pandemic, the number one question received from business insurance clients was, "Is there any coverage for loss of business income due to the local government mandating the closure of businesses?"
Unfortunately, in 99.9% of policies, loss of business income cause by a mandated shutdown, is not a coverable loss. Nor can coverage be purchased for such a loss under most commercial policies.
Only when there is direct "physical loss" to your business and a local government entity mandates that you close, will "loss of business income" be coverable. The other .1% of policies that may cover this type of loss would be a very specialized and very expensive type of policy or endorsement created by a specialty carrier such as Lloyds of London.
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