Back to Business: FAQ on Carrying Insurance in a Pandemic
Will insurance cover losses from the Coronavirus shutdown?
While this seems like a relatively simple question, there are really no easy answers for the various scenarios surrounding your decision to reopen your business in the wake of global shut-down and local mandates for how we meet and/or conduct business. The unique circumstances surrounding a loss are so broad that each insurer must investigate each loss on a case-by-case basis to determine applicable coverage. The best way to know what your policy affords in coverage for you is to simply ask by submitting a loss report.
Keep in mind that there are some aspects of coverage that are universal and would most likely apply in the same way to all policy holders. One of those situations would involve operating or opening against the mandate or in violation of the guidelines set forth by the authorities in your area. The industry standard for this holds that if you are breaking the law in the operations or activities of your business or organization, your policy provisions are voided. In effect you are breaking the policy contract by failing to act in a reasonable way toward your client and those who could be affected by your decisions. With that in mind, you should be certain you are informed and up to date on the changing rules and guidelines that are being handed down for your specific location and/or business. Pleading ignorance to a mandate is not a viable defense.
Another aspect of insurance to understand is that your agent is a representative of the company your policy is written with, but your agent will typically not be involved in settling a claim for you. Although it may be frustrating to not get a definitive yes or no from your agency producer, the application of your coverage is not determined by your agent. So, please be aware when you ask if your insurance will cover you, this is a question for the Claims Department and will require filing a loss notice to get determination of coverage from a loss. Loomis Insurance Agency personnel is always ready to assist you in filing losses and claims reports but will never be in position to tell you how or if your policy will cover you in a loss. We leave that to the professionals trained in that aspect of insurance.
Are you liable if an employee gets sick with Covid-19?
In the operation and activities of your business or organization there is always a risk of someone being injured or suffering loss while interacting with your business. This is especially true and something to be aware of in dealing with the reopening of your business in the wake of an infectious disease pandemic. This risk for claims of liability is why you will want to be diligent to protect both your employees and clients from any type of contact with infected individuals or surfaces. Following the guidelines from the Centers for Disease Control (CDC) is extremely important in protecting against these claims. For a listing of processes that are necessary for your type of business, you will want to access the CDC’s website at www.CDC.gov and be sure to follow their recommendations for hygienic and sanitation protections.
Because of these factors, you may be wondering if reopening is worth the risk for claims. The idea of legal liability, however, is dependent upon two important criteria:
Was there an actual loss sustained?
Were you legally negligent and responsible for the loss?
In most cases when a claim is presented against you there would be an investigation of the facts of the claim and your insurance company’s representative would look for evidence that your place of business was solely responsible for someone’s illness or injury. In the case of a communicable virus such as COVID, an individual would have to be able to prove that there was a direct link from your place of business to their illness. If the individual is out going to other businesses and activities and has had other possible exposures, then it would be very difficult to prove that your business was the sole exposure to an illness that is highly contagious.
As with most claim scenarios, the facts and the unique circumstances will drive the outcomes and decisions regarding liability. If you are faced with a claim for liability due to COVID-19 exposure, you should contact your agent and make a report for your insurance company to investigate.
Should I cancel my insurance coverage during the Coronavirus shutdown?
The short answer here is that canceling your coverage on a temporary basis is not a good idea. If you are cutting back operations or have been under a shut-down for a period of time, your insurance needs may have changed or decreased for now but if you intend to return to full operation, it would create more chance for you to have a gap in your coverage if you fail to pick coverage back up at a future date. Canceling coverage altogether would create a scenario for losing discounts and deductible credits for continuous claims-free experience. When you first write a policy, you would not be eligible for those discounts and canceling your coverage would mean that you would start over with a new policy and lose your current policy experience. Some types of coverage, such as auto insurance, also require continuous coverage for Financial Responsibility in your state, so canceling coverage might create a surcharge for failure to keep coverage.
You may want to check with your agent as many insurance companies have responded to the COVID-19 pandemic by offering premium refunds to clients. The companies recognize that people have been driving less and business have had less exposure to claims so they have set up refunds that are a percentage off your liability premiums. Loomis Insurance Agency clientele should contact the agency and we can let you know if your company has implemented this type of credit.
Many insurance companies are also offering premium payment assistance by allowing extra time to make a payment. Please do bear in mind, however, that your next premium cycle might come due very close to your payment extension and would create a double payment cycle which might not be of much benefit to you in the long run.
We would encourage you to work with your agent to see if there are options we can provide to help with your premium challenges as you move through the pandemic and the economic hardships that have been placed on the businesses and organizations faced with monetary shortfalls.
Where can I get guidance on what each company requires for reopening?
The best way to determine any restrictions or guidelines from your carrier is to go to the company websites for direction. You will find information specific to COVID-19 responses. This will give you information and provide a guideline for what your insurance carrier has defined as necessities for resuming your operations. For your convenience, here is a partial listing of our companies and their websites:
Am Trust Insurance: https://www.amtrustfinancial.com
Auto-Owners Insurance: https://www.aoins.com
Brotherhood Mutual Insurance: https://www.brotherhoodmutual.com
CNA Business Insurance: https://www.cna.com
Grinnell Mutual Insurance: https://www.grmconline.com
Guide One Insurance: https://www.guideone.com
West Bend Insurance: https://www.wbconnect.com
Please feel free to contact our agency or go to our Contact Us page to send a private email with your questions or to request a phone call. We are always happy to assist you and look forward to working together in moving forward with reopening and resuming operations. We are here for you!