Litigation Blog

Communicable Diseases and the CGL Policy

How could disease outbreaks impact commercial property and general liability insurance?  The CGL policy will typically address a disease pandemic under three areas of exclusion within the policy: (1) Bodily Injury Exclusion; (2) Business Interruption Exclusion; and (3) the Pollutant Exclusion. Courts throughout the country treat these exclusions very differently and therefore counsel should be consulted to assist the claims unit and potentially underwriting in applying the policy to a coverage request under the policy.

The standard commercial general liability policy includes “disease” under its definition of bodily injury. Barring any coverage-altering endorsements (and depending on the state and the specific terms of the policy), it would appear that there is a debate as to coverage if an insured is found liable for accidentally helping spread a disease; for example, if a music venue did not take adequate precautions to halt the spread of an infectious disease on its premises. McMahon, Lucian, "Commercial insurance, diseases, epidemics." Insurance Information Institute, The Triple-I Blog. April 12, 2017. But just as with commercial property policies, liability policies often include pollution exclusions. How pollution is defined – and how broadly a court will interpret the scope of the exclusion – will all impact whether liability arising out of a disease outbreak is covered or not. Id. A policy may also include exclusions for any liability arising out of communicable diseases, just like the exclusions found in personal liability insurance policies. Id. More »

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