Your Insurance and COVID-19

Q: Is there “business income coverage” if a governmental authority (civil authority) requires my business to close?

A: Not likely. There typically needs to be physical damage to property leading to the cessation of a business.1 (i.e. If people don’t go out to eat because of the fear of the virus, which is not a covered cause of loss.)2 The same is true if people are restricted to their homes because of an outbreak of the virus in their community.

Q: Is there “business interruption insurance coverage” for communicable diseases such as COVID-19?

A: Not likely. Most coverage requires covered direct physical damage to property of a customer or a supplier. To date, there are no reported cases in the United States regarding business interruption coverage in connection with human infectious disease epidemic or pandemics.

*Although coverage is unlikely doesn’t mean you cannot file a claim. Claim investigations are handled on a case-by-case basis. Please be sure to contact our agency if you have any questions.

General Liability

Q: What actions/inactions could possibly lead to my business being found legally liable for an injury from COVID-19? *this is not an exclusive list

A: Allowing an employee who is known to be infected with the virus to continue working; failure to adhere to required heath and prevention guidelines; remaining open following an order by a civil authority to close, etc. (Gov. Tony Evers Emergency Order – Prohibiting Mass Gatherings of 10 People or More)

The likelihood a business owner may be held legally liable for injury to a third party who contracted COVID-19 on the business’s premises is very low, but not impossible.3

Worker’s Compensation

Q: Does COVID-19 create a workers’ compensation exposure for my business? (For Employers)

A: Not likely. Any illness/disease must meet the following requirements to be covered.4 The illness must be “occupational” meaning it arose out of and was in the course and scope of the employment and was caused by conditions “peculiar” to the work. COVID-19 would likely not qualify.

Unless, it can be proven that the employee has an increased risk of contracting the virus due to the peculiarity of his/her job. (i.e. healthcare, transportation, delivery workers, etc.) These situations are evaluated on a case by case basis.

Q: Am I covered by worker’s compensation if I contract COVID-19? If so, how do I file a claim? (For Employees)

A: (See coverage above). In the event you become ill, it is your responsibility to; tell your supervisor immediately; obtain any necessary medical attention; and maintain all relevant medical and payment records for possible future use.5 It is your employer’s responsibility to report your injury/illness to their insurance carrier, the insurance carrier will report to the Department of Workforce Development.6

What Employers Need to Know

Check out this resource guide for questions like: What if my employee is showing signs of an illness? Should we be reviewing our FMLA, PTO (or equivalent) and sick leave policies? Should we be reviewing our discrimination and ADA policies? Are employees entitled to unemployment benefits? And more!

*Statements in this document as to policies and coverage provide general information only and does not constitute legal or professional advice. Coverage details regarding specific insurance should be discussed directly with a licensed agent.

Sources:

1-https://cdn.ymaws.com/www.iiaw.com/resource/resmgr/coronavirus/business_income_covid19.pdf

2-https://www.iamagazine.com/strategies/read/2020/03/13/can-coronavirus-concerns-trigger-business-interruption-coverage

3-https://cdn.ymaws.com/www.iiaw.com/resource/resmgr/coronavirus/cgl_and_coronavirus.pdf

4-https://cdn.ymaws.com/www.iiaw.com/resource/resmgr/coronavirus/workers__compensation.pdf

5-https://cdn.ymaws.com/www.iiaw.com/resource/resmgr/coronavirus/wc_info_for_the_public_flyer.pdf

6-https://dwd.wi.gov/covid19/public/wc.htm