COVID-19 has impacted business in multiple ways, from shutdowns to social distancing to remodeling. Many industries have been forced to lay off thousands of workers due to revenue losses and increasing debt. An essential key to survival will be business interruption insurance that covers these losses.
Business Interruption Coverage Explained
Since the pandemic caught the whole world by surprise, it's safe to say that neither
business owners nor insurers were prepared for the fiasco it created. The current debate is whether or not the virus effects can be defined as "physical damage." It's also unclear if an "All Risk" policy covers losses from the pandemic. Some policies do not include coverage for uncommon viruses, diseases, or the spread of bacteria.
Enterprise owners need to discuss these issues with their insurance agents and determine if the fine print includes or alludes to interruption clauses. Otherwise, there's a chance that present and future claims related to the pandemic will be denied.
Steps Toward Gaining Business Interruption Insurance
The first step to protecting your business against damages caused by the coronavirus is to ask your insurer, in writing, for a complete copy of your insurance policy in case all you possess is a partial copy. Make sure to specify in your written request that you need full documentation of your endorsements containing all clauses, provisions, exceptions, and inclusions.
After you've obtained the documentation, carefully scan the document to find the phrase "cause of loss to trigger coverage" and check if your coverage includes
business interruption, contingent business interruption, contingent extra expense, and an extended period of indemnity. Study the terms and time frames to see if they apply to your situation.
Additionally, know what your policy says about protection for ordinary payroll, civil authority that enforces a "safe at home" policy, and ingress/egress, which covers financial losses due to physical loss or damage. The latter issue relates to third-party property. Ingress means capacity or right to enter a property, while egress refers to exiting a property.
Check if your policy mentions covered perils related to events that damage a home such as fire, theft, storms, explosions, or perhaps the spread of disease, and find out what it says about covered perils associated with ingress and egress.
What To Do If Coronavirus Coverage is Denied
The pandemic creates many new questions for insurance companies that haven't been answered before. So even if your policy includes terms such as covered perils, it's possible your claim may be denied. It's merely a new type of crisis that hasn't been thoroughly thought out by various insurance companies. There may be cases, however, in which pandemic losses are automatically covered.
The key is not to guess or assume on what your coverage includes, but to contact your insurance agent and find out answers to the following questions:
1. Does your policy cover pay for lost wages of employees stricken with COVID-19?
2. Will your business be paid for revenue losses due to government-mandated shutdowns caused by the pandemic?
3. Will the policy pay for new technology allowing employees to work at home to prevent the spread of the coronavirus?
4. If you invest in digital transformation to allow for remote work, does your policy pay for training personnel to learn the new technology?
5. Does your policy reimburse your
business if your company is forced to cut business hours?
6. What is the coverage available if your company, such as a hotel, needs to invest in remodeling to allow for social distancing?
7. Will the policy pay for the medical expenses of customers who contact the virus on your property?
The pandemic has created a long list of concerns about standard insurance policies, so learn about
business interruption coverage to add further protection to your company.
Contact our experts at
Club Agency Insurance Brokerage in Garden City, New York today. We are ready to help you with all your coverage needs.
