Insurance Coverage That Can Aid Your Company
Updated March 18, 2020
Do you already have insurance coverage in place to help cover the inevitable financial loss that will result from the COVID-19 (coronavirus) outbreak? Some types of insurance you may already have in place are:
- Event Cancellation Insurance
- Business Interruption Insurance
- General Liability Insurance
- Employment Practice Liability Insurance
- Political Risk Insurance
- Civil Liability Insurance
- Directors & Officers Liability Insurance
- Credit Insurance
- Worker’s Compensation
Document Losses and Preserve Information. During this time, you must diligently work with your internal teams to preserve and document any losses your business faces and any expenses you are or will incur. In this way, you will be poised to bring a successful claim against your insurance company under your policy(ies).
Coverage Defined. "Business Income Coverage" (BIC) is included in most commercial liability policies. BIC is invoked when a covered "cause of loss" results in a downturn, shut down or suspension of a business’s operations. Merely the inclusion of BIC coverage does not automatically equate to coverage of losses due to COVID-19. For a COVID-19 caused slowdown or business suspension to be covered under your policy, it will depend on whether communicable diseases are included in your policy as a covered "cause of loss."
Review Current Policies. Review your policies with an eye toward provisions showing coverage for loss of income, business interruption, force majeure, catastrophic events, etc. Also, be prepared for resistance or denial of potential claims from your insurance broker or carrier. Insurance policies are contracts – and can be interpreted in various ways. You should push back on your carrier if you receive hesitation or a denial and you may choose to work with legal counsel to determine how best to assert claims or dispute a denial.
Mitigate Losses. But also, work to mitigate your losses. Companies and individuals are duty bound to act, or react, in a reasonable manner when dealing with losses. Any failure to act in a reasonable fashion may result in an outright denial of coverage.
Provide Proper Notice. If you do have an insurable claim, make proper and timely notice. This is key to coverage. Even if you are uncertain if your claim will be covered, be sure to submit notice/tender your claim. If you don’t file a claim, you can lose your chance if the time to bring a claim passes. So, no matter your determination or interpretation of your policy(ies), submit a timely claim to preserve the possibility of coverage. Better safe than sorry.
Third Party Certificates of Insurance. Look externally as well. Do your customers have you listed as an additional insured on their policies? Do you have additional insured on your policies? As events and circumstances unfold, companies may find multiple sources of potential coverage. If this is a possibility for your company, be sure to file a claim under any possible policy. If your company covers others on your policies, be prompt in responding and filing claims that third parties may be covered under or risk facing third party actions against your company for lack of action.
Regardless of what your company’s insurance policies say today, we expect to see insurers specifically excluding diseases and outbreaks as policies come up for renewal in the coming months.
The information above is intended to act as a general resource and therefore does not address all considerations and jurisdiction-specific analyses that may need to be undertaken prior to taking action. Thus, employers should seek specific counsel.