thx to clif for answering this :)
The short answer for future readers is:
No, cover songs are not allowed on wikiloops. Please do make use of the "report track" button should you stumble on a cover song here.
We do respect your and others music copyrights, and we cannot pay the royalties to the music industry for cover songs (this is a free site after all), nor deal with legal claims in a way big sites like p.e. YouTube can.
Please act responsible when uploading to wikiloops, the internet is not outside the law.
Thank you.