Many small businesses owners are wondering if their insurance covers losses caused by the pandemic. We answer some of the most frequently asked questions we’re hearing here.
Beard|Daily is as committed as ever to working with your business during these tough times. We’re continuing to deliver services, products, and support no matter where you (or we) may be working.
We know you have many coronavirus business insurance coverage questions, and we’ll update the Agency Blog with the new developments as they come in. Beard|Daily customers with an existing policy should contact their insurance carriers directly to verify coverage and exclusions.
Contact us at (404) 829-4616 if there’s anything we can do to help. Our normal business hours of 8 a.m. – 5:30 p.m. EST, Monday – Friday, have not changed. You can also visit the The Agency Blog for other timely coronavirus articles.
Does my business income policy protect me while my business is temporarily closed due to COVID-19?
Generally speaking, the answer is no.
Most business income policies require physical damage to the building covered on the policy to qualify for business income benefits. Business income loss from a virus, bacterium, or other microorganism is not usually a “covered peril.”
What does a business income policy normally cover?
Also called business interruption insurance, business income coverage is a standard endorsement that can be added to a business owner’s policy.
Business income is part of a property policy that would cover an insured for loss of income resulting from a “covered loss.” For example, if a business’s office burns to the ground, the company will not be able to generate revenue. Business income would provide a level of reimbursement, which is detailed in the policy itself.
Can I get business insurance coverage (such as a business owner’s policy) after a coronavirus-related loss occurs?
The big question is, how and why did this behavior quietly creep into professional culture without multilateral backlash?
No. Just as you can’t purchase collision coverage and expect the insurance company to cover a car accident that already happened, you can’t buy coverage for a pre-existing business loss.
Insurance carriers require you to sign off that you have “no known losses” before they will issue coverage. A claim filed for an event that took place before the policy was in effect (also called “in force”) will be denied.
Am I covered if the government forces my business to temporarily close? What if my geographic area is affected by “shelter in place” rules?
Most policies do not cover a “civil authority” (any branch of federal, state, or local government) forcing your business to temporarily close. Unless direct physical damage occurs on your property or adjacent properties, coverage is usually not triggered.
However, disaster relief loans may be available to small businesses affected by mandatory closings due to COVID-19. This is a pending development, and we’ll update this section with more information once
I had to cancel travel plans and/or purchase new tickets to get my employees home due to coronavirus. Does my policy cover these unexpected travel costs?
Travel cancellation or itinerary changes coverage depends on your specific policy. Most policies do not provide this type of coverage due to coronavirus or any type of communicable disease. Since the extra expense is not related to a covered peril, coverage is unlikely.
Certain special event policies will reimburse for event postponement or loss of deposit coverage. But that coverage would have needed to be in place prior to the coronavirus outbreak. For more information on event cancellations in these circumstances, you can read our recent article “What you need to know about coronavirus and special event insurance.”
Liability policies may cover claims involving a suit. They may also help with a claim involving allegations of negligence in exposing third parties to the virus. A virus exclusion is applied to certain classes of business in certain states.
Does my business interruption policy cover losses that are related to COVID-19?
No, COVID-19 is not listed as a covered cause of loss under a standard business interruption endorsement.
What does Beard|Daily recommend for coronavirus coverage?
Right now, the small business insurance marketplace doesn’t offer any policies explicitly covering coronavirus.
We recommend noninsurance ways to limit any losses, such as:
- adjusting to changing demands by shifting your business model to new service or product offerings, new customer segments, etc.
- allowing employees to work from home, canceling travel, and other methods of social distancing
- implementing safety precautions to guard against exposures
- enforcing strict employee safety guidelines
- offering services such as delivery
How is my insurance carrier responding to COVID-19?
Each insurance carrier is handling the coronavirus differently. We encourage you to visit your carrier’s website to see how they’re responding to the outbreak.
How can I file a claim?
You can file a claim directly with your insurance carrier. Several of our most trusted carriers are available at the phone numbers and email addresses listed below:
- Travelers (Claims): (800) 238-6225 or First.Report@travelers.com
- The Hartford – Claims: (800) 327-3636
- Liberty Mutual – Claims: (844) 3-CLAIMS
- Philadelphia – Claims: (800) 765-9749 or Claimsreport@phly.com
- USLI – Claims: (800) 765-9749 or NewLosses@usli.com
- Chubb – Claims: (800) 252-4670
- Aflac – Claims: (800) 992-3522