Coronavirus and Insurance: What Can You Do To Stay Safe? Is Business Income Covered?
With the global economy grinding to a halt due to the outbreak of Coronavirus (COVID-19), it is important to take measures to protect yourself and your loved ones. As of March 19th, the virus has killed 91 Americans and infected more than 8800. The death rate from COVID-19 in the U.S. currently sits at 1.5%, which is expected to drop as more tests are confirmed. Many people walking around with coronavirus show no symptoms, but can still be contagious. It is important to wash your hands thoroughly with warm, soapy water and use hand sanitizer if you are out in public. Avoid unnecessary interactions with groups of people and avoid touching your face. These are measures everyone should take immediately. Business owners have been presented with a unique and challenging circumstance and many are asking the same question:
WHAT ABOUT MY BUSINESS? I AM BEING FORCED TO CLOSE. DO I HAVE ANY BUSINESS INCOME COVERAGE?
Many businesses are being forced to close due to the spread of the virus and business owners are wondering if they have any insurance protection, especially for lost income. The short answer is no. Business Income coverage on a commercial insurance policy only triggers as a result of direct physical damage from a covered cause of loss. Virus and bacteria are near universally excluded from most insurance policies, as is communicable disease. However, you will want to review your insurance policy or consult with your agent to verify that fact. Some business owners have wondered if coverage for business income is available from the "civil authority" section of their insurance policy. But again, without direct physical damage to a premises by a covered cause of loss, there is no coverage found there either. Another question some have asked relates to the ability to purchase insurance to provide coverage for a business income loss due to government mandate and/or virus, communicable disease etc. The reality is, there are no insurance companies that offer this type of coverage and if they did it would be prohibitively expensive. There were forms created by the Insurance Service Office (maker of all standard insurance forms) in February addressing business income losses due to communicable disease, but those forms were never filed with any states and ISO does not plan to release those forms at this time (nor do carriers wish to offer said coverage). Bottom line, no matter how you slice it, there is no coverage available to business owners for business income losses resulting from the fallout of coronavirus.
Our hope is that you all will remain safe during this crisis. If you are a business owner, the federal government is making low interest loans available to help cover income losses and help you pay your expenses and employees. You will want to check with the Small Business Administration website to get more details on how to do that. We will have more articles relating to Coronavirus and insurance in the coming days.
DISCLAIMER: Any information and recommendations contained in this communication have been obtained from sources believed to be reliable. However, Lon Brown Insurance, Fearrin Insurance, Key Henson Jackson Insurance and Auto-Owners Insurance Group accepts no legal responsibility for the accuracy, sufficiency, or completeness of such information. Additional safety and health procedures may be required to comply with local, state, or federal law. Content in this document is not legal advice, nor does it amend the terms, conditions, or coverages of any insurance policy issued by herein above listed insurance agencies and/or companies. Materials provided by Brown Insurance Group for use as an educational tool.