Right now, many business owners are scrambling to find clauses within their insurance policies which covers them from any COVID-19 related losses or issues. In order to find out what protection and coverages are under your current policies, you need to review what you currently hold.
Common coverages needed during COVID-19 related incidents include:
- Business Interruption Coverage
- General Liability Coverage
- Workers’ Compensation Coverage
- Directors and Officers Coverage
Business Interruption Coverage
In essence, business interruption insurance helps a business replace and recoup lost income after a disaster or unanticipated event occurs. Most often, this is not a separate policy but is part of a property/casualty policy.
In order to utilize your business interruption coverage for COVID-19 related losses, you need supporting evidence to prove that your loss of income occurs as a result of the outbreaks.
While most policies do not include specific language to outbreaks of disease, some policies may include coverage for “Interruption by Communicable Disease,” but COVID-19 may not fall under that category. It’s worth reviewing though to see if you do qualify for recouped losses.
General Liability Coverage
The commonly asked question by business owners across the United States is: Will general liability coverage cover COVID-19?
A general liability policy will address the risk of parties outside of your employees who bring claims against you for damages you may be legally liable for.
So, how does COVID-19 play into this? General liability coverage is not likely to protect you from direct losses, however, if someone alleges who has failed to prevent exposure to COVID-19, you may be covered from such claims.
Specific wording on “Communicable disease exclusions” and “Organic pathogen/fungi/mold/mildew/yeast/microbe exclusions” need to be reviewed in your policy.
Workers’ Compensation Coverage
As it stands, the Department of Labor has issued that, “All federal employees who develop COVID-19 while in the performance of their federal duties are entitled to workers’ compensation coverage pursuant to the Federal Employees’ Compensation Act (FECA).”
However, most states will likely object to nongovernmental employees filing for workers’ compensation due to COVID-19. In many states, “ordinary diseases of life” are not qualified for workers’ comp– as these illnesses are defined as an illness to which the general public is equally exposed, and is not a direct result of the peculiar or unique nature of an employee’s job.
But, it is still worth reviewing your state policies to see if your employees will be able to use workers’ compensation coverage.
Directors and Officers Coverage
Directors and officers coverage works to protect individuals from personal losses if they are sued as a result of being a director or officer for a business. These look to cover losses that result from claims against the insured for a wrongful act. In addition to losses, it can also cover legal fees incurred.
When reviewing the typical coverage under directors and officers policies, there are typically three categories for coverage. They include:
- Coverage for non-indemnified directors and officers loss
- Indemnified directors and officers loss
- Organizational loss, or entity coverage
While many believe such losses incurred by COVID-10 claims will be covered, there are always caveats, which is why it’s important to sit down with a business litigation attorney to review your specific policy coverage.
I’m not sure what my insurance policy covers. I need help.
Navigating insurance policies and their fine print is difficult to manage, especially in the midst of the global pandemic. Don’t make assumptions. Seek legal advice immediately. We are working with business litigation attorneys across the country. Contact us today.