Response to COVID-19 from an Insurance Standpoint

As a local insurance agency and local small business, we share in the anxiety of the uncertainty of where the future will take us and how it will impact our small businesses.  We hope to be a resource for ALL small businesses in our community and strive to keep you updated on any changes in the insurance industry as it related to COVID-19.   

We hope to clarify for many of you the questions regarding your insurance policies and if there is any coverage available to each of you as many of you close down your businesses, lay off employees, or have staff that has been diagnosed with the virus.

There are several types of insurance coverage I would like to go over to help clarify some of the questions we have been getting.  The first is in regarding your General Liability policy. General Liability covers bodily injury and property damage to a 3rd party while conducting your business.  After trying to figure out a possible incident in which your General Liability policy may even respond in this case, the most likely would seem to be if you or your staff spread the virus to your clientele causing bodily injury.  While this may be far stretched, I am using this as an example to point out that your General Liability policies do contain an EXCLUSION form for communicable diseases and viruses so there is no coverage or defense coverage in the event you are sued by a 3rd party.

The second type of coverage, commonly found on a Property form on a policy, to discuss is business interruption.  Business interruption is triggered by a loss of property from a covered peril on the policy that causes your business to not be able to continue generating normal revenue in the event of the covered loss.  The COVID-19 is not typically going to cause a loss to property; therefore, the business interruption coverage is not triggered and will not pay out for having to close your business as a result of the virus alone.

The third type of coverage to discuss is workers’ compensation which pays for medical costs and wage loss to employees who are injured on the job.  The coverage on the policies does typically cover work-related infection disease, BUT it is not built to cover the spread of an infectious disease not considered to be work-related, such as COVID 19.  COVID 19 is considered incidental or common to all employment. There are some exemptions for those individuals whose work causes increased exposure to the disease, such as first responders and frontline healthcare workers.  Those covered by the policy will have to meet the criteria for exposure to be eligible and you must contact your insurance carrier to discuss.

Again, as the insurance industry, as well as other industries, evolve and make changes throughout this pandemic, we try to keep up to date information on our Facebook page – PrecisionServicesColorado.  We encourage you to like and follow our page to stay connected.

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