Communicable Diseases can impact the operations and income of any business. As we watch the impact of the current communicable disease, the Coronavirus, businesses need to be prepared for how it may affect them.
Some coverages that may be impacted by Coronavirus include; Business Income, General Liability, and Workers Compensation, however, each contain a limitation or exclusion for a virus or communicable disease.
Business Income pays for actual loss of business income, up to the limit listed in the policy, sustained due to suspension of your business operations as a result of damage or destruction to your property. This suspension must be due to a direct physical loss at the premises, result from a covered cause of loss, and not be excluded. Virus or Bacteria are usually excluded in the policy.
General liability may also be impacted by the coronavirus outbreak if there are third-party bodily injury claims resulting from exposure to harmful conditions or failure to exercise reasonable care in guarding against the risk of exposure to the virus. Most General Liability policies include an exclusion for Communicable Diseases.
For an injury to qualify under Workers Compensation, two tests must be satisfied:
The illness or disease must be “occupational," meaning that it arose out of and was in the course and scope of the employment; and
The illness or disease must arise out of or be caused by conditions “peculiar" to the work.
Using those two qualifiers, the Coronavirus is no more occupational in nature than a regular cold unless the employee has an increased risk of contracting the virus due to the peculiarity of their job. It will be up to each carrier to investigate and decide if the disease is covered or not. Here is some more information from the Idaho State Insurance Fund: https://idahosif.org/covid-19-coronavirus-information-and-links/
Can I Purchase Coverage for the Coronavirus?
The information on the Coronavirus is still evolving, however, we have inquired of several insurance carriers regarding the availability of insurance coverage for the Coronavirus. While some do offer an endorsement to eliminate the communicable diseases exclusion on some coverages lines, most so far are not offering coverage for the Coronavirus. The information available is still coming in and there are too many unknowns regarding the impact the virus may have on our local businesses and communities. Until more is known, insurers will continue to proceed with caution regarding coverage for the Coronavirus.
How Can I Prepare My Business?
Although it isn’t possible to eliminate the chance of your employees contracting a virus, the Centers for Disease Control and Prevention (CDC) has provided some good information and recommended strategies for employers when dealing with a Communicable Disease. These can be found at this link: https://www.cdc.gov/coronavirus/2019-ncov/specific-groups/guidance-business-response.html
· “Coronavirus Raises Insurance Questions But Catastrophe-Tested Insurers Are Prepared” By Elizabeth Blosfield | February 20, 2020
· Coronavirus, Pandemics and Workers’ Compensation by Chris Boggs 1-28-2020