In Articles

By:  Joan Cerniglia-Lowensen, Esquire

The global effect of the novel coronavirus on international business has left many companies who rely on Chinese companies as part of their supply chain scrambling to minimize damage.  This experience should prove instructive to businesses when considering their insurance readiness to deal with communicable diseases.

The outbreak has had serious effects  on a number of businesses, including technology giants like Apple and Facebook, and those in the travel and retail industries such as Carnival Corporation, Wynn Resorts, Nike and Under Armour.  Even smaller businesses that provide products in the supply chain to these giants are feeling the effects.

Companies should utilize this opportunity to review their insurance coverage to determine whether their losses in the event of a pandemic communicable disease would be covered.  In general, business interruption insurance provides payment to a policyholder for lost profit and continuing unavoidable expenses due to property damage.  In most cases communicable diseases are not considered property damage.  Therefore, obtaining a specific endorsement to the relevant insurance policy identifying loss of orders or other business that may occur as a result of a communicable disease is prudent.  Many commercial policies also specifically exclude losses arising out of any type of virus or infectious disease, so business owners should review their policies carefully with their insurance brokers and attorneys

The coronavirus has resulted in mandatory quarantines in some instances.  Many insurance companies exclude the actions of any civil authority, business owners should act in a proactive manner to assure that their businesses are protected in this event.  These actions should include consulting with appropriate insurance counsel prior to purchasing liability coverage.  The business should further carefully document any lost earnings during the critical period of time to ensure appropriate reimbursement if the coverage extends to the event.

Finally, if employees at the business are reporting illness, the company should act prudently to minimize any risk of transmission.  This should include encouraging the employee to stay home, encourage remote work and tracking internally any outbreaks among staff.  Minimizing any damage caused by the coronavirus or any other more common medical outbreaks remains a challenge for businesses.  The damage, however, can be minimized by thoughtful preplanning.


Joan Cerniglia-Lowensen is a Member with Pessin Katz Law, P.A. (PK Law).  She has over twenty five years of civil litigation experience throughout the State of Maryland in both state and federal courts. Prior to becoming an attorney, Ms. Cerniglia-Lowensen was a registered nurse achieving both a BSN and a MS with a major in nursing.  As an attorney, she primarily practices in the health care defense field.  She defends nurses, doctors, veterinarians, dentists, healthcare providers, healthcare facilities, mental healthcare workers, urgent care facilities and nursing homes in medical malpractice matters; professional liability and tort claims; and disciplinary actions before various regulatory boards.  She provides risk management advice to a variety of healthcare entities, insurers and individuals and continuing education to healthcare workers and entities; and has been published in both journals and texts on issues of risk management and liability of healthcare professionals.  She also defends individuals and entities in a variety of civil litigation matters. She can be reached at 410-339-6753 or