Insurance coverage for COVID-19 — Executive Summary

Posted by Edward McNamara on March 20, 2020

Friends,
 
We are all receiving emails, calls, videos, letters, faxes, couriers and pony express information on an almost per minute basis with constantly changing actions and opinions.

It is challenging to actually know what to do because what was not probable yesterday might have just become probable today. So, I wanted to let all of you know that no one at Armada represents any legal profession or any accounting profession, so, when it comes to taxes and legal issues, please contact your professional advisors. 

I will start out by saying we are not promising ANY coverages, or ANY guarantee of any claims being paid, but just ideas and suggestions of what you may want to discuss with your leadership inside your organizations to make sound business decisions and as always consult your trust insurance broker.
 
Now, here is my Executive Summary: – File a claim if you feel you have been affected by COVID-19.  And File ASAP – Like today. 
 
Right now, our team is sending every single one of our P&C clients a personalized Claim Reporting Guide.  This guide helps you decide how, what and where to file a claim.  We provide information on “When Does An Incident Require A Claim Be Reported” and “What Information Is Needed To Report A Claim”  as well as a list of all THEIR policies, THEIR policy numbers and terms, including where to report that claim, which carriers on which policy , the specific carriers’ claim email address and phone numbers specific to THEIR insurance.
 
I suggest you file anywhere and EVERYwhere you feel you might have a claim.  Remember, do not file false claims, but carriers have always stated that if you think you might have a claim, they want to know about it.  It is always better to give them notice then to file late.
 
So, the next question is what some potential policies and what areas might be places to look for coverages…..below we have learned about some potential coverages. 
 
Business Interruption – Almost all policies are looking for the “trigger” or specifically what peril caused your property/BI loss.  If your policy is an “All Risk” (many are) this may be the best opportunity for potential coverage.  If the presence of COVID-19 makes your manufacturing, restaurant, office building or any other property uninhabitable, and many attorneys are claiming this, that may be enough to trigger needed for coverage. (providing you bought this coverage)
 
Contingent Business Interruption – If your suppliers or distributors of your products have a covered cause of loss on their property, this may trigger your Contingent BI.  Contingent BI is designed to protect your company from lost earnings resulting from a loss at someone else’s property.   If you have that situation and you have CBI, you should file a CBI claim as well. (providing you bought this coverage)
 
Civil Authority is for coverage of lost earnings from denied access to your place of work.  Such as from a governor, health department or federal agency.  This usually has a sublimit or cap and usually has a short time period for the coverage and also has a delay or waiting period to see if the access denial can be repaired.  But most are around or under 72 hours.
 
General Liability – this is usually in place if someone claims they got COVID-19 from you or your location and others.
 
Workers Comp – This is very interesting because we are hearing states making changes/claims/statements about how it may or may not help.  In most cases we found an interesting fact, you generally cannot send your employees into and infected area or a place with known disease. (sometimes this is specific to foreign countries, but sometime not)  Again, file a claim and speak with your legal counsel.
 
I could go on, but I promised a quick summary.
 
State and federal governments keep moving the bar. 
 
Lastly, here are some notable articles to read if you want, I believe the government will continue to get involved and may ask/require carriers to become more lenient and maybe even pay BI/CBI claims that might area they would have normally not paid, (and then the government maybe will even bail the carrier out afterwards (again, my opinion based on little or no facts, just past history))
 
Ohio small businesses are now eligible for SBA's Economic Injury Disaster Loans. Please see below for more information:
  • Low-interest loans of up to $2 million are available for small businesses and private non-profits.
  • Loans may be used to pay fixed debts, payroll, accounts payable and other bills and have repayment options of up to 30 years. 
  • Interest rates are 3.75% for small businesses and 2.75% for private non-profits.
  • Need help filling out the application? Access these step-by-step instructions
 
California said they are allowing a delay of up to 60 days to pay premiums (https://www.businessinsurance.com/article/20200319/NEWS06/912333600/California-insurance-commissioner-Ricardo-Lara-premium-grace-period-coronavirus )  many states will most likely follow.
 
New Orleans restaurant sues for BI – this is one of the first of many to come
https://www.businessinsurance.com/article/20200317/NEWS06/912333570/New-Orleans-restaurant-sues-for-coronavirus-business-interruption-cover-Oceana-G
 
Force Majeure Clause potential – just starting to hear this one, but not certain on limits.
https://coronavirus.kjk.com/2020/03/20/will-covid-19-trigger-a-force-majeure-clause/
 
IRS moved April 15th tax day to July 15th – nice to know if you owe money, you may have a delayed payment (yeah)
https://www.cohencpa.com/insights/articles/irs-notice-2020-17-clarifies-income-tax-payment-de
 
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