Given the mass hysteria and possible misinformation that exists, it is crucial that we help educate and inform these small businesses about their insurance program.
We’ve been getting a lot of questions dealing with the coronavirus and its impact on small business insurance specifically. And for the most part, there’s not a black and white answer to any of the questions.
While we can’t address every question, let’s take a look at a few key questions and issues.
- If my employee gets the coronavirus while on the job, are they covered?
- Does my business have loss of income coverage?
- What other insurance coverages do I need to be aware of?
If my employee gets the coronavirus while on the job, are they covered?
As a small business owner, you are concerned about the health and well being of your employees.
What happens if one of your employees contracts COVID-19?
Can the employee file a workers comp insurance claim?
The simple answer is, “Yes.”
Before we go further, it is crucial to understand something.
If you are filing a workers’ compensation claim because you caught the coronavirus, it is imperative that the insurance company have the ability to see that you caught the coronavirus while on the job. So while yes it would be covered, there is some proof that has to go along with that.
When in doubt, speak with your Insurance Advisor
Does My Business Insurance Have Loss Of Income Coverage For The Coronavirus?
Unfortunately, for most small businesses, there is not going to be any coverage if you are forced to shut down your operations because of the coronavirus.
Federal, State, and Local Governments are imposing restrictions that affect many businesses.
Some businesses, such as those in the Restaurant Industry have been forced to close for dine-in customers.
Some businesses have been (or will be) deemed as “non-essential” and will be forced to either shut down operations or to close their business to outside traffic.
The reason is that there are specific exclusions in most business insurance policies.
While a blanket statement can not be made for EVERY policy, the vast majority exclude losses due to virus or bacterial infections and events, thus loss of income from the coronavirus would be excluded.
Possible Loss Of Income Coverage For Restaurants Due To Coronavirus
Many insurance carriers have special enhancement endorsements for Restaurants.
Many of these enhancements to the base policy include a section that deals with the spoilage and contamination of food.
These endorsements state something along the lines of this:
We will pay for your loss if a governmental body requires that your operations be suspended due to discovery or exposure to food contamination at your premises
IF, and this is a very big IF, this policy language were to be triggered…there MIGHT be some business interruption coverage.
In the weeks and months to come, this type of policy language will be under immense scrutiny.
While we never suggest filing unwarranted claims, if you have any doubt as to whether or not your policy might respond, the only real manner to get an answer is to start the insurance claim process.
What Other Insurance Coverages Do I Need To Know About?
With the government sanctions being imposed, small businesses are being forced to adapt their operations in order to remain in business.
Restaurants have to stop taking people in the dining room.
Businesses are having to reduce hours of operations.
In response, small business owners are coming up with solutions to change their distribution model, and their standard operations.
When looking at the change in business operations with regard to business owner’s insurance, there are a few things we needed to think about:
- Hired and Non-owned Automobile Coverage
- Cyber liability
Hired And Non-Owned Automobile Insurance Coverage Due To Coronavirus
The government is asking that people quarantine themselves and practice social distancing.
For small businesses that serve or provide goods to the public, if they want to remain in business they will need to offer take-out or provide delivery.
If you are asking your employees to make deliveries, first you need to have a conversation with your insurance advisor to make sure that you are up to speed with all the implications. Secondly, you want to make sure that you have hired and non-owned automobile liability. This coverage protects your business in the event that your employee goes out, gets in a wreck while delivering this food and is sued.
Let’s look at an example!
Your employee is using their personal vehicle for YOUR Business and hits another person. The person suing your driver is going to see that that driver was acting on your behalf and they’re going to sue your business as well. If your business does not have Hired & Non-Owned Auto Coverage, your business will be without coverage.
Depending on the type of industry you are in, you might have an owned auto on a business auto policy. But for restaurants specifically, most do not ownan automobile insurance policy, so the only way to pick up coverage is on the business owner’s policy.
Coronavirus Increases Cyber Liability Insurance Need
Businesses are asking more and more people to work remotely.
That means your employees are logging in to transact business and perform their daily tasks and that brings enhanced risk and exposure to cybercriminals hacking and accessing your business data.
Businesses have all these employees using their home computers. Chances are these employees are logging in on an unsecured internet connection from their house. This exposes your business up to a whole new area of risk.
Cyber Liability can provide coverage to your organization in the event your company’s network and crucial data is exposed.
For most small businesses the coverage not expensive. But it’s going to protect you in case your system is hacked or your system is breached.
Check your policy and have a conversation with your insurance advisor to make sure you have cyber liability and that your limits of liability are high enough.
North Carolina Business Insurance Specialist
If you are a North Carolina Small Business, feel free to reach out to ALLCHOICE if you have any questions about how the Coronavirus and your insurance work. We are a local, independent insurance agency that specializes in protecting your business.