With the past few weeks and foreseeable near future bringing continual unexpected developments and disruption VOCO2 has started a page with information we think may be helpful in connection with insurance and risk control issues. We will be updating this page from time to time. Of course, there are government resources that have been announced and there is no ONE set of guidelines we can provide as relates to the current situation. We are here for our insured clients and welcome any questions you may have.
Regarding Business Interruption and Insurance:
We have been asked by some of our insured’s if there is any business interruption / extra expense coverage available due to the Coronavirus. The short answer is, unfortunately, “No”. Before Business Income Insurance responds there must be physical damage to property leading to the cessation of a business. This requirement applies to business income dependent property losses (supply chain) and civil authority losses covered by business income policies. Additionally, there is a specific property exclusion applicable to viruses that may (generally will) apply. This is true of “standard” business income forms; there may be some proprietary forms that respond, but these are rare.
However, in these unprecedented times there are hard hit industries such as Restaurants which are challenging the intent of insurers to exclude loss due to a virus. We cannot be certain of what the outcome will be. Therefore, we are not discouraging our clients with business interruption losses from putting in claims. To position yourself to do this, we recommend:
- Prepare a detailed timeline of impacts to business with specifics.
- Keep track of any civil authority orders, local or otherwise that have impacted your business.
- Log and track impacts to your workforce that have created additional expenses.
We expect insurers to deny BI claims as the intent of these policies is to cover normal losses such as fire, but this is unchartered territory. The available information as to what extent coverage, if any, insurance carriers will provide continues to contain many unknowns. Various state insurance departments and the courts are weighing in and it is an evolving situation. While it is your insurance company that will ultimately decide if you have coverage, VOCO2 will be here for you to assist in any way that we can.
Regarding Workers Compensation:
In the interest of minimizing risk to employees and reducing “community spread,” we know many businesses have converted to remote work environments. With workers compensation insurance, your employees are covered no matter where their work is performed. However, this only applies if the injury or illness arises out of and occurs within the scope of their employment. As always, any claim for workers’ compensation benefits is subject to the underlying facts, terms and conditions of the policy and any state laws or regulations that may apply. If you believe you have a workers’ compensation claim, please file a claim with your carrier.
General Liability, Pollution Insurance, and Professional Liability and the Insurance Industry Approach / Beware of New Exclusions:
The insurance industry has been grappling with the effects of Covid with many of our Underwriters now working from home. For the most part the response has been excellent and there is very little change in service turnaround.
The industry is also in general very concerned that while they are big business their capital is limited and they do not become a source for solving worldwide problems. There have been discussions among insurers in the insurance trades about at some point working with government in the same way that insurers did after 9/11 to offer coverage for Terrorism. Nothing has been proposed to our knowledge at this time and it will be some time we believe before any practical developments evolve to assist our insured clients. In the meantime, we are seeing insurers come with various approaches on excluding virus related claims. Many insurers are coming up with new Covid and virus related exclusions and we are navigating these and communicating these to our insured clients on a case by case basis as policies renew and new terms are offered.
Thoughts regarding conducting Business and Contracts:
Tim Corbett is on retainer for VOCO2 and is available for questions. Also, we are attaching links to a couple of his recent articles here. If you have questions for Smart Risk please direct them to any member of the VOCO2 team or firstname.lastname@example.org
Federal Guidance Document from Smart Risk:
Risk and Contract advice Document from Smart Risk: