Updates and Resources

Globally and locally, we are all currently being affected by Coronavirus (COVID-19).  As individuals, families, businesses, and governments attempt to handle this unprecedented pandemic event, many questions are arising over insurance coverages, business interruption protocols, and claim processing procedures.  Capstone has compiled some quick facts for reference and some locations you can receive more in depth information that may be more applicable for you and your business.  We will keep you up to date as we receive more information and will do our best to answer your questions.  Despite these trying times, you can be certain Capstone will remain your risk management advocate. 

Coverage-Specific Information

  • Workers’ Compensation:
    • While most workers’ compensation policies do not cover claims over communicable diseases such as COVID-19, there may be exceptions due to the extenuating circumstances and the prevalence of this situation across all industries.  These claims will be examined on a case-by-case basis dependent on your insurance carrier.
    • Workers’ compensation carriers are also working with employers on payroll reporting to control insurance premium costs.  Those that do monthly reporting will be able to lower premiums based on lowered payrolls if employees are not working or business operations are paused.  Those that have auditable policies will be able to report more accurate payroll numbers at the end of their policy term. 
  • Environmental Liability
    • All environmental liability policies are different, and therefore you will need to examine your particular policy to see if there is coverage for bodily injury, property damage, or cleanup liability resulting from a virus or bacteria.  Some things to consider when reviewing your policy:
      • Specific wording referencing viruses, bacteria, and microbial matters
      • When coverage begins i.e., when the virus is discovered to have been present, when a governmental agency identifies the presence of bacteria leading to the spread of the virus, etc.
      • Any exclusions regarding human-to-human transmission of communicable diseases
    • Due to this unprecedented event, we will see insurance carriers limit their future policies with such coverages.
  • Business Interruption
    • Arguably one of the most significant coverages to have during this time, it is important to first identify whether the disruption in business has been caused directly or indirectly. 
      • Direct coverage is usually triggered with the physical loss or damage of business or personal property, dependent on your specific policy wording.
      • Indirect coverage is tied to anything else that would cause the potential loss of income.  A majority of claims from this situation will be indirect and caused by civil authorities or supply chain interruptions.
    • Coverage will be examined once again on a case-by-case basis, dependent on policy endorsements and wording.  If you are going to file a claim, have the following information ready to submit:
      • Outline all exact losses as specifically as possible
      • Any direct damage losses
      • Civil actions that have affected you or the area your business is located in
      • Any knowledge you may have about the direct or indirect losses of your suppliers
    • There are predicted to be certain exclusions for coverage such as:
      • If there was an introduction or spread of the virus with malice intent
      • Losses attributable to fear of contracting the virus
      • Fines and penalties brought against you for insubordination with a civil authority
    • Insurance carriers do their best not to speculate about such claims and will need concrete information to best handle the application of policy coverages to each particular situation.
  • Cyber Liability
    • Many businesses, including Capstone, have switched a majority if not all operations to virtual/online capacities to accommodate for employee safety.  Cyber liability coverages could be triggered if there is the release of any protected information regarding your business or your employees.
    • Cyberattacks via emails about coronavirus target the fearful.  Clicking unfamiliar attachments or emails could result in the loss of information or the delivery of harmful software to employee computers.  Many cyber liability policies deal directly with these types of losses. 

Next Steps

  • Be prepared for potential losses.  It is expected that your business will feel impacts from this event.  Your insurance coverages may be able to cushion the unexpected repercussions.
  • Modify business plans and platforms to the best of your ability.  While there are likely to be critical operations to keep your business going, identify any areas that can be minimized and alternative working methods. 
  • Keep employees up to date with company measures to protect them from the virus and virus related incidents (cyberattacks, supply chain disruptions, etc.)
  • Estimate overall company functions and examine the potential impact of full business closure.

Links to Resources