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A civil authority clause, also known as a public authority clause, is an insurance policy provision that outlines how the loss of business income coverage (BIC) applies when a government...
If a local, state, or federal government entity prohibits access to the business premises, and thereby forces businesses to temporarily close, BI insurance may cover lost income through a civil authority clause.
Two elements were required to trigger a civil authority order provision in a business interruption policy in most 9/11 cases: 1) some type of physical damage must trigger the civil authority order; and 2) a direct relationship must exist between the damaged property, the civil authority order, and the prohibition of access to the insured’s premi...
Civil authority insurance is usually an extension of business interruption insurance. Here we explain all the civil authority insurance requirements!
In the homeowner’s policy, Civil Authority coverage is for loss of rents, fair rental value and additional living expenses (i.e. hotel, food). For business and commercial policies, it is for business interruption and extra expense.
Civil authority coverage is intended to apply to situations where access to an insured’s property is prevented or prohibited by an order of civil authority issued as a direct result of physical damage to other premises in the proximity of the insured’s property.
In simple terms, Civil Authority coverage is triggered if all of the following elements are met: government authority prohibits access to the insured property (or dependent business); the prohibition was issued as a result of physical loss or damage caused to property within a one-mile radius of the insured property; and
The civil authority clause, a pivotal component in insurance policies, dictates the reimbursement of lost income in instances where government entities deny access to insured property.
COVID-19—When Civil Authorities Take over, Are You Covered? IRMI (Mar. 2020). White Paper: Shutdowns by Civil Authority. Risk & Insurance (Feb. 2019). Clark Schirle. Civil Authority and Ingress/Egress Coverage. The Brief (Winter 2018). Matt Weaver et. al., September 11, 2001, and the Impact of Actions by Civil Authorities Lessons Learned ...
Civil authority - extends business interruption coverage to losses incurred when an order of civil authority (e.g., state, local or federal governmental entity) prohibits access to your business premises resulting from physical damage caused by a covered peril to adjacent or nearby property (if that property is of a type that is covered by the ...