As the ramifications from the spread of the Corona Virus intensify. We thought we would pass along some information about the typical commercial insurance policy as it pertains to any coverage from Corona Virus related losses.
The following is some industry information on potential Corona Virus coverage issues. This information is not specific to your policy, so if you have any questions as it relates specifically your policy please contact our office.
Business Interruption/Loss of Business Income
Do I have any coverage under my Loss of Business Income/Business Interruption Coverage on my policy?
We are receiving calls everyday regarding the insurance implications of this virus, and the most common question relates to business income, specifically: “Is there business income coverage if a governmental authority required businesses to close?”
Unfortunately, No, there is no business income coverage for this scenario. This is the short answer. Before business income responds there must be damage to property leading to the cessation of a business. The requirement applies to business income dependent property losses and civil authority losses covered by business income policies. Additionally, there is a specific property exclusion applicable to viruses that generally will apply. This is the true of “standard” business income forms.
Will my employees have any coverage under my Workers Compensation Policy for work related illness?
The short answer is, not likely. Two tests must be satisfied before any illness or disease, including the Coronavirus, qualifies as occupational and thus compensated under workers' compensation:
1. The illness or disease must be occupational, meaning that it arose out of and was in the course and scope of the employment; and
2. The illness or disease must arise out of or be caused by conditions peculiar to the work
An argument can be made that the illness could meet criteria 1 (above), but its not likely to be judged to meet criteria 2 (above). Other than the fact that the Corona Virus is garnering intense attention, in most cases it is no more occupational than the flu.
Source: Big “I” Independent Insurance Agents Association
Just a word of caution, with businesses having employees work from home there is an increase in Cyber Liability exposure including allowing hackers access personal data, ransom ware and computer viruses that can be detrimental to your business operations. You should consult an IT professional to make sure your have the proper firewalls, virus and malware protections in place with your employees working remotely.
It’s a good practice to make sure you have adequate Cyber Liability Insurance in case the unforeseen happens. Cyber Liability will typically pay first party expense for notification, credit monitoring and ransom if there has been a breach. It will also cover third party expenses if you are sued or held accountable for damages by clients or government regulators. If you’re not sure you have the proper protection in place, please contract our office for more details.
Please if you have any specific questions please reach out to our Business Insurance Department for more information.
The TDA Insurance Team
246 Liberty St
Walled Lake, MI 48390