Navigating Insurance During COVID-19:
These are very uncertain times for many business owners around the country. Some of you may be wondering if your policy will respond to potential claims, and what you can do to get through this. Here is some guidance I have put together for all of my clients, and you are welcome to it.
1. Insurance and COVID-19 is tricky. There are several coverages that could potentially respond (business income/business interruption, civil authority), however in the broadest terms, in order for coverage to be triggered there has to be “direct physical loss” meaning a physical change to the insured/covered property (such as fire). **Please see disclaimer below** In addition, there may be a virus/bacteria exclusion on the policy. Even though coverage may not apply, if you have suffered a loss, we suggest filing the claim anyway. It is ALWAYS best to let the carrier adjudicate the details of the claim. In addition, if you have an employee that has sustained a COVID-19 work related injury, please report it to the carrier for final determination. Most importantly, should the claim be denied, the claim denial letter may be useful when applying for assistance down the road.
This document is not intended to provide any legal advice or opinion on any individual situation and should not be relied on to determine insurance coverage or lack thereof as relates the Coronavirus. Insurance forms and endorsements vary based on insurance company, changes in edition dates, regulations, court decisions, and state jurisdiction. The information is based on review of insurance coverages, sources we deem to be reliable and communications we have received from insurance companies and other resources. We make no representation or warranty as to the accuracy of information as applied to individual cases. Please advise our office if you want to submit any claim for coverage with your insurance companies.
2. Practical things to do right now if your business is suffering. Work with your agent to do several things, right now, if you are hurting due to this crisis:
– Ask about what you can do to stop your billing or prevent policy cancellation. The California Dept. of Insurance issued an order late last week that is requesting insurers to allow a grace period on billing and/or policy cancellations due to non-payment. This may look differently among insurers (some may hold the billing, some may still send out bills but not process the cancellation, etc.), but it is something to ask about.
– Ask about lowering your exposures during this crisis. Is your policy rated off of sales or payroll? See if you can lower those estimates to reduce the burden right now. Some policies may have minimum premium requirements, so adjusting the exposures may not matter, but if you have the ability to make an adjustment, that could potentially provide relief, too.
3. Use this time to research backup income alternatives. The SBA is putting together loan programs for businesses that will have very low interest rates. You can find out more information here. In addition, congress is likely to pass a bill that should provide some help for small businesses, too. Beyond that, is there a way your business could modify or adjust its operation to attract/retain customers? Can your business move to an online/remote model? Can your business provide services through non-traditional channels like webinars/videos? Many restaurants and goods providers are moving to a “to-go” or “pick-up” type service, can you?
4. Do you have a disaster preparedness plan? If not, put one together! This is the time to do that. Create a safety manual, and add this information to it. Or add this information to your employee handbook. This is the time to put together a plan to mitigate potential for losses in the event of catastrophic claims. Do you need to have access to a secondary location if your primary location suffers a major loss? Do you have a back-up supply chain for goods/services necessary for YOUR business? Do you have remote capabilities? FEMA guidelines for disaster preparedness are here.
5. Make sure you have copies of important documents. Documents such as your current insurance paperwork, wills/estates/trust documents, other legal paperwork. Make sure you have these files stored safely electronically that you can access anywhere in an emergency.
6. Do you have a current will in place? If not, now is the time to get that put together. They are often less expensive than you might think, and if you own property, it can save substantial amount of time settling matters at the time of your passing. No one wants to think about passing away, but we should be prepared all the same. Do you need help finding a reputable attorney? Let me know, and I can help you.
7. Most importantly, follow all government ordered protocols. This means following stay-at-home orders, following health guidance regarding hand washing and other basic guidelines for mitigating the spread of COVID-19. Follow all of the CDC guidelines found here.
If you are feeling like you want to help in some way, look to volunteer at your local food bank/pantry. These organizations are doing amazing work in tough times, and could use all of the extra volunteer help they can get. These will surely be trying times for everyone, but it is important to work together especially in times of crisis. We are always stronger and better together. I am always available for questions or feedback.
JoAnn Schaub,CIC, CRM, CISR
President, Schaub Insurance Agency, Inc.