The coronavirus has taken the world by storm, disrupting businesses around the world and changing how we live our daily lives. Social distancing is in full effect as schools, sporting events, and other activities are being shutdown to help mitigate the spread of COVID-19. We understand that this is a very stressful time for businesses of all industries and of all sizes.
An abundance of information is available on the coronavirus and one of the most important things we can do right now is be proactive in helping reduce the spread of COVID-19 and continue to count on reliable and trusted sources like the Centers for Disease Control & Prevention, the World Health Organization, and The State Department.
As COVID-19 continues to spread, it is creating a lot of fear and uncertainty, causing a lot of businesses to take a look at their insurance coverage and ask some pertinent questions.
- Are employee coronavirus claims compensable?
- Am I covered for Business Interruption due to the coronavirus?
Are employee coronavirus claims compensable?
Zenith Insurance Company stated that for most employees, an illness from an infectious disease is not work related. A person sick and at work would carry the burden of proving the triggering event of the illness arose out of employment and occurred in the course of employment. There is typically no workers’ compensation coverage for a disease to which the general public is equally exposed.
For example, a parent taking care of a sick child over the weekend may go to work on Monday and begin to show flu-like symptoms. Although that individual is sick and is at work, any claim made would not be compensable. By contrast, a healthy EMT called to the home of an elderly patient with a respiratory illness, where the EMT then tests positive for the illness may have a compensable claim. Insurance companies will address each claim based on its facts.
Is my business covered for Business Interruption due to the coronavirus?
National Underwriter magazine does a great job breaking down business interruption insurance. There are three conditions that must exist in order for coverage to be triggered:
- An actual loss of business income.
- A necessary suspension of operations during the period of restoration.
- The loss must result from direct physical loss or damage at the described premises from a covered cause of loss.
Business interruption insurance is designed to replace business income loss and the costs of ongoing expenses when normal business operations have been interrupted as a result of a direct covered property loss. For example, a fire forces your business to temporarily close. Due to this closure, business interruption insurance helps cover lost income and other expenses (like rent and utilities). The spread of a contagious illness, such as COVID-19, H1N1, Ebola or others, is not a covered cause of loss and does not create physical damage to the premises, so there is no business interruption coverage.
We each share one another’s concerns for the well-being, health, and safety of our employees and our businesses. While each has different vulnerabilities and disproportionate risks it is our hope that we come together during this time when optimism is in short supply, but high demand.
Helpful links and suggestions to lessen the economic impact:
- Small Business Administration: SBA Announcement for Disaster Assistance Loans
- Virginia.gov: Updates from the Governor’s office and the Commonwealth of Virginia
- Virginia Chamber of Commerce: Resource Center
Suggestions for supporting small businesses:
- Purchase gift cards for use at a later date
- Consider re-booking travel arrangements instead of canceling reservations
- Take advantage of curbside pickup/drop-off services
- Ask/check-in with your favorite small business owner and how you can help, let them know you’re thinking about them
- Donate to your local area food bank – find yours here
- Talk to your local Chamber of Commerce for recommendations on how you can support the small businesses in your area