COVID-19’s Effect On Property Losses And Subrogation Claims

 Wednesday, May 13, 2020

 CLM Magazine

Since March, the coronavirus pandemic has impacted virtually every aspect of life across the globe, and its effects have been unprecedented, in both their scope and speed of impact. Even after the U.S. and other countries attempt to ease lockdowns and restore some level of normalcy, the ripple effects will continue.

The impacts will be long-lasting and far-reaching, including the influence they will have on the nature, frequency, and extent of property losses.

Water losses occurring at vacant commercial properties during the coronavirus closures will, on average, be larger than they would have been had they occurred at any other time.

Commercial properties that are not normally vacant for more than a weekend will now go weeks without anyone entering the building. That means what would normally have been a small water loss that went undetected during closures will now be a big loss, and big losses will now be catastrophic.

Executive orders have also shut down contractors nationwide. COVID-19 closures will cause substantial delays in property repairs and, thus, increase time-element losses. Even after restrictions are lifted and repairs can commence, contractors will face backlogs that will delay repairs further still.