By: Corin Cook on March 17th, 2020
COVID-19 FAQS: BUSINESS & PERSONAL INSURANCE COVERAGES
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It has been a crazy several weeks for businesses and individuals alike and the COVID-19 (coronavirus) outbreak has raised questions we never thought we would ask or answer.
Businesses are closing down, people are losing pay, events are being cancelled, and people are staying in their homes, wondering what the business and personal implications could be for them.
At Berry Insurance, we prioritize education. As experts in the industry, we want to make sure our clients fully understand their insurance protections, especially when it comes to unforeseen circumstances such as the current coronavirus outbreak.
Honestly, we might not have all the answers right away. This situation is new to us too, so we are working with our carriers to investigate and educate ourselves on various insurance scenarios we never anticipated.
Below are all the questions we have received related to COVID-19 and how it relates to business and personal insurance.
Does business interruption insurance cover closures due to coronavirus?
Business interruption insurance covers a business’ loss of income resulting from a disaster. Where property damage only covers physical damage to a building, business loss insurance covers the loss of income during the disaster and rebuilding period.
Unfortunately, closures from viruses, including COVID19, are not typically covered under business interruption insurance because in order to be covered, the interruption must be caused by or result from a covered loss, which includes only physical loss or damage.
While we feel in most cases, insurance won’t cover due to a coronavirus closure, it may be worth a shot to file a claim. Our carriers have informed us that each claim will be reviewed individually and adjusters may decide that some detail may make a business eligible for coverage in certain situations.
Note: If your small business is affected by the coronavirus outbreak, the Massachusetts government has instituted a Small Business Administration Economic Injury Disaster Loan (EIDL) Program, which could also assist you during a business closure.
What if a government shutdown forces us to close?
Unfortunately, the same rules apply. Whether it is a voluntary or forced closure, business interruption coverage will most likely not cover, but again, it doesn’t hurt to file a claim.
Does commercial property insurance cover coronavirus-related losses?
Commercial property insurance covers losses or damage resulting from incidents such as fire, theft, or natural disaster.
These insurance policies generally include an exclusion of loss due to virus or bacteria which states:
“We will not pay for loss or damage caused by or resulting from any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease.”
Because of this, commercial property insurance will most likely not cover any virus-related losses.
What if I have to cancel a work event/gala?
Commercial property insurance does not cover cancellation of work events, conferences, or galas.
When planning an event, business owners can purchase special event coverage, which may cover cancellations, but if you do not have that coverage already in place, you are most likely out of luck.
Does workers’ comp cover coronavirus?
Workers’ compensation insurance covers medical payments and a portion of lost wages for employees who become injured or ill due to work-related causes.
Typically illness can be covered by workers’ compensation if the employer exposes the employee to some sort of substance, chemical, or allergen that makes them ill, but when it comes to viruses, it’s not as straightforward.
When an employee files a workers’ compensation claim, the insurance company will only cover if the injury or illness is proven to be work-related based on factors such as the time, location, and activity that caused the injury or illness.
In terms of coronavirus, proving the illness was contracted due to work can be difficult, but those who work directly with the public, specifically in the healthcare field, or travelled to infected areas for work may have a case.
All employees and employers who feel they may be exposed to the virus at work should keep detailed records of any potential exposures to strengthen their chances of being covered by workers’ compensation.
Employers should also report any suspected work-related coronavirus incidents to their insurance company immediately.
All workers’ compensation claims are evaluated individually and either approved or denied depending on whether it is determined to be work-related.
Is my business covered if I now offer delivery?
In these times, many businesses are making changes to the way they operate.
With new government restrictions and social distancing standards, many businesses who have not previously offered delivery services now do.
Adding delivery to your operations changes your business exposures, so you may need to adjust your business liability and business auto coverages to cover the new exposures.
Changes will depend on whether the business is using company-owned vehicles or employee-owned vehicles and whether employees are already included on your commercial auto policy.
Because every case is different, be sure to give your insurance agent a call to make sure your business is protected.
Do I need to increase my commercial property insurance if employees are taking business equipment home? Do I need to increase my homeowner’s insurance if I am bringing my company’s property home?
Commercial property insurance covers a business’ property, whether it is within the walls of the business or elsewhere.
If an employee brings home work equipment, it is covered under commercial property insurance, but business owners may want to increase their “off-premises” coverage to ensure that any extra materials employees are taking off the premises is covered.
If you’re an employee bringing home equipment, you do not need to make any changes to your insurance coverage. It is up to your employer to ensure they have the proper coverage for their equipment.
Does cyber insurance cover if I am working from home on my personal computer?
Cyber insurance covers costs associated with a cyber attack or data breach.
This includes malicious actions such as hacking, viruses, phishing, denial of service (DoS) ransomware, malware and more; but also data losses from incidents such as computer glitches, power surges, and accidental deletions.
The insurance covers costs and legal fees incurred from business losses, investigations, lawsuits, and extortion.
Cyber insurance has several restrictions in place affecting when it will provide coverage. In order to even be eligible for an insurance policy, businesses need to show they are already taking several preventative measures to avoid a cyber attack or data breach. Letting employees use their personal computers is not a preventative measure, and is actually an exposure making companies even more susceptible to an attack.
Most insurance companies will not cover this because they only cover computer systems (including computers, input and output devices, network devices and equipment, peripheral devices, storage devices, back-up facilities, mobile devices, and associated computer programs, software and applications, including cloud-based computer programs, software and applications) leased or owned by the named insured.
However, insurance companies we work with said they would review each work-from-home claim on a case by case basis.
What if I spread the virus? Am I covered if someone tries to sue me?
Theoretically, someone could sue you for making them sick, but the case would not make it far enough for you to need to use insurance.
If someone were to sue because you infected them, they would need to prove that you were the one who got them sick, and that it was intentional or negligent.
Will wedding insurance cover cancellation/postponement due to coronavirus?
Typically, wedding insurance does include cancellation or postponement coverage, but since the coronavirus outbreak, many companies are not issuing any new policies with those coverages.
Those with existing policies including the cancellation or postponement coverage should be covered if they need to cancel or postpone.
Coverage will vary from carrier to carrier and policy to policy, so reach out to your agent or carrier to confirm if you will be covered due to a coronavirus-related issue.
Should I put my college child back on my auto policy since they were sent home from college due to COVID-19?
Many parents choose to exclude their children from their auto policies while they are away at school, because they aren’t living at home and aren’t driving.
If this is the case for you, yes, you should certainly add them back to your policy.
Any licensed driver living in your home should be on your auto policy. If they are not on the policy and are involved in an accident, there may be no coverage.
Uncertainty in Insurance
As you can see, even insurance companies are still navigating the various situations related to this unforeseen pandemic.
In many cases, there is no clear-cut answer whether insurance policies will cover coronavirus-related claims, so it may be worth it to try to submit a claim before giving up.
In the coming weeks, Berry Insurance will continue to brainstorm and research claims scenarios related to COVID-19. If you have any other questions related to coronavirus and your insurance coverage, feel free to reach out — we will update this article as we get any new questions or information.