You’re a business owner and this corona virus (COVID-19) has limited your business hours and now your business has been deemed a non-essential business. It was mandated by the Mayor. Will your commercial insurance help protect you from the loss of income?
This is a very common concern and one we’ve addressed for many of our amazing small business owners. It does come with an answer that breaks our hearts.
There is no coverage for this type of loss. The policy does not have any language that pertains to pandemics or virus-related losses. To utilize the loss of business income the loss would need to come from a listed peril such as a fire. You would have to have damage and a virus doesn’t constitute damage.
Now we know that carriers are working quickly to work on amendments for proper coverage in the future. I think it’s important to remember when September 11th occurred, there was no coverage for all of those business that lost income at that time. By November 2002 there was an optional coverage item that was added to all commercial policies called TRIA coverage. It’s an inexpensive option that helps when acts of terrorism shut down a business. We foresee this occurring with virus related/pandemic losses.
At the moment if you are a business owner your options are those coming from the Government. They are working on long term, low interest loans to help keep you a float during and after this time frame.
Now what about my workers compensation insurance will it help protect me? Please see this important insert from a recent National insurance update.
Workers’ Compensation
As the COVID-19 impact grows, many businesses have also begun to question if an employer can be held liable if an employee tests positive for coronavirus or causes it to spread. Generally, Workers’ Compensation (WC) may not cover claims based on communicable diseases; however, there may be exceptions depending on how and where the coronavirus is contracted. OSHA has issued a reminder for employers that COVID-19 is not exempt and is considered a recordable illness, subject to all the same rules and failure-to-record fines as other workplace illnesses or injuries. The regulatory agency has also advised employers to develop infectious disease preparedness plans and implement basic infection control protocols to help prevent further spread of the virus (source).18 If more than one employee or individual were involved, a WC claim could be considered a catastrophic loss or exposure claim, and could kick in full policy limits. Excess WC policies that incorporate a communicable disease event aggregate or crisis management expense reimbursement coverage have been aimed at the healthcare sector and are currently available in the market.
Now what about me as the Business Owner-can I get a disability income policy?
These types of policies won’t cover you either. Why not? Your business wouldn’t have coverage because the virus doesn’t last long enough to disable a person. There is a 30-60-day elimination (waiting) period before the policy takes effect and at the moment the statistics are telling us the virus lasts on average 14 days.
So we hate that we can’t give you some great feedback but we will say the best thing to do is to watch/read the news often for new bills being passed. We will try to stay on top of these changes as well and report them back to you. If you have any questions or concerns, we’re here and always happy to help. Please reach out to us and if we don’t know the answer, we’ll try our hardest to find an answer for you.
Well wishes to everyone!