With the number of people infected by the Coronavirus growing every day, customers are voicing their concerns about how their insurance coverage will protect them from potential closers and lost revenue.
We’ve had a number of clients ask what coverages will protect them from losses resulting from the COVID19 virus. Organizations that rely on physical locations for their business like manufacturing plants, schools, nursing homes, daycare facilities, and bus companies, aren’t sure what protection they have from business interruption.
Unfortunately, it appears that the ISO Business Income and Extra Expense Coverage Form, CP 00 30 10 12, coupled with the Causes of Loss – Special Form, CP 10 30 09 17, will not cover these losses for three reasons:
- Coverage applies only if there is “direct physical loss of or damage to property.” The virus is wreaking havoc on people but not property.
- The “Causes of Loss” form excludes coverage “for loss or damage caused by or resulting from any virus, bacterium or other microorganisms that induce or is capable of inducing physical distress, illness or disease.” The Coronavirus fits this description.
- The form also excludes losses resulting from “delay, loss of use or loss of market.” There is no coverage for losses resulting If a homecare operation has to stop sending aids or clients start to cancel because the virus has caused people to stop traveling. (Big I Insurance)
Your organization has a number of decisions to make if unable to shift operations from a physical location to a remote opportunity. Some organizations can continue operations remotely, while others may be forced to close due to the Coronavirus. We recently published this article on how to keep your business operational during the outbreak.
The Insurance Services Office (ISO) announced on Feb. 7, 2020, that they’ve published two advisory endorsements to the Business Income & Extra Expense Coverage Form for insurers to adopt and file if they wish According to the blog post on Verisk’s website:
The first endorsement provides limited coverage in the event that a business suspends operations due to closure or quarantine ordered by a civil authority. This endorsement also provides coverage with respect to dependent property that is named in the policy and for vehicles and mobile equipment, where applicable.
The second endorsement also provides coverage when a business is forced to suspend operations due to the closure (or restricted use) of the public bus, rail, or ferry lines by civil authorities. (Verisk)
Workers’ Compensation is another coverage that can be affected by the COVID19 virus if a hypothetical worker can prove that they were exposed to the virus at their place of employment.
Commercial General Liability coverages can be applied in cases where an employer has allegedly neglected to remove an infected employee from the workplace, thus facilitating the further spread of the virus. Be aware, ISO offers an endorsement, CG 21 32 05 09, Communicable Disease Exclusion. This endorsement excludes coverage for bodily injury, property damage, and personal and advertising injury arising out of the actual or alleged transmission of a communicable disease. It also applies to alleged negligence in:
- Supervising, hiring, employing, training or monitoring of others that may be infected with and spread a communicable disease;
- Testing for a communicable disease;
- Failure to prevent the spread of the disease; or
- Failure to report the disease to authorities.
For more information on whether your organization is prepared for the potential losses coming from the Coronavirus outbreak contact a Risk Advisor or Call 914-357-8444.
https://www.insurancejournal.com/news/national/2020/02/26/559383.htm
https://www.biginy.org/newsfeed/Lists/Posts/Post.aspx?ID=778
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