Insurance

FREQUENTLY ASKED QUESTIONS: COVID-19 AND BUSINESS INSURANCE

What insurance do I need for my business to be covered for losses due to a pandemic?

To be covered against a business’ loss of revenue due to a pandemic, such as COVID-19, you would need to have purchased an insurance policy, or an endorsement for your policy, that covers such a loss before the outbreak started.

It’s unlikely you’ll be able to buy this coverage during a pandemic. After the pandemic is over and the market has stabilized, contact your insurance agent, broker or company to inquire about specific coverage.

If you need help understanding your policy, contact an insurance professional, like your insurance agent or your insurance company. If you do not have a copy of your policy, ask your agent or insurance company to send you the full policy, including all applicable endorsements and declarations.

I already have a business policy that includes business interruption or business income coverage. Will it cover my losses?

Business interruption and business income coverage protects your business against losses you sustain when your business operations are suspended due to direct physical loss or damage. Generally, while contaminated inventory or equipment that cannot be sold or used may be considered physical damage under your policy and may trigger insurance coverage, it is questionable whether your business interruption or business income policy specifically protects against virus and bacteria losses.

It is important to review your specific insurance policy to understand your specific exclusions, coverage limits and deductibles.

Will my business policy cover my business’ loss of revenue because of a government closure due to the coronavirus?

There is a clause in most business policies called “Civil Authority,” which addresses the situation where the business has been ordered to shut down by civil authorities. If your policy requires a “covered cause of loss” as the reason why the civil authority restricted access to your business, your insurance company would need to determine if the coronavirus outbreak is a covered cause of loss. Some business policies do not have this requirement. Please read your policy carefully as losses occurring as a result of a virus or bacteria are typically excluded.

Does my business policy cover the cost of buying additional cleaning and disinfectant supplies due to COVID-19? 

Business Property insurance does not typically cover the cost for buying additional cleaning supplies due to the concern of COVID-19 spread.  However, if there was a specific contamination at the specific location of your business, there may be limited coverage during the restoration period.

I have sick employees due to coronavirus and have to temporarily close my business. Will my business policy cover me?

Business policy coverage can vary. Check with your insurance agent, broker or company to see if your policy covers an employee availability due to epidemic or pandemic.  Typically, business policies cover business closures for events such as fire, a burst pipe, or a windstorm and exclude closures due to pandemics.

Does my Workers’ Compensation policy cover my employee who tested positive for COVID-19?

Workers’ Compensation policies typically cover only “occupational diseases,” which are diseases that are unique or particular to your employment. Workers’ Compensation policies do not typically cover illnesses or disease form “ordinary diseases of life” that could have equally been contracted during the employee’s personal life.

What is my insurer’s responsibility if I file a claim?

Your insurance company must conduct a reasonable investigation on your claim. If it denies your claim, it must inform you of the specific language in the policy that denies coverage. If you need more information or have questions, contact your insurance agent or company.

Where can I go to learn about other types of insurance and COVID-19?

Businesses may find these resources to be helpful:

– NAIC Coronavirus Resource Center, “Insurance Policy Coverage” tab  https://content.naic.org/naic_coronavirus_info.htm#tab-1592-4

– NAIC Insurance Brief:  COVID-19 and Insurance
https://content.naic.org/sites/default/files/inline-files/Insurance Brief – Covid-19 and Insurance.pdf

Note:  The Hawaii Insurance Division does not have the authority to require insurance companies to sell or retroactively cover pandemic coverage or policy endorsements.

It is important to review your specific insurance policy to understand your specific exclusions, coverage limits, and deductibles.

If you need help understanding your policy, contact an insurance professional, such as your insurance agent or your insurance company.

If you do not have a copy of your policy, ask your agent or insurance company to send you the full policy, including all applicable endorsements and declarations.