Perhaps no other event in recent memory has served as such a strong reminder that we truly live in a connected global environment. The most significant concern is for the health and well-being of ourselves and our families, and business owners and their employees. However, the potential for quantifiable hits to the bottom line are increasingly becoming apparent and deserves our attention.

Here at The Koch Company, we are receiving questions from our clients about whether or not this situation might have insurance coverage implications. On a high level, this event likely falls outside the scope of coverage. Reviewing this in more detail brings into focus three main coverage areas with the most potential for questions and discussion; Business Interruption, General Liability, and Workers Compensation.

Business Interruption

Alongside the daily updates of infected individuals and new case counts, we also hear news stories of closed businesses, schools, and other public venues. The fundamental purpose of property/business interruption insurance is to pay when there is a direct loss to physical property due to a covered peril. A pandemic disease would not be considered as causing direct damage. There is no damaged roof, burned out building, broken pipes, etc. causing the business interruption.

General Liability

Another concern might be whether or not your business or organization could be subject to allegations or claims of spreading the virus via allowing contact with an infected individual or not taking enough precautions to prevent contamination. If such a claim arises, coverage may be difficult to find in general liability policies. First of all, the virus, bacteria, and communicable diseases exclusions in general liability policies will be scrutinized by adjusters. Additionally, the question of whether there is actual legal liability for this type of event may be an issue. Similar to the need for direct physical damage in a property policy, a basic provision of liability policies is that the insured person or organization has some degree of legal liability for the loss.

Workers' Compensation

The coverage with a lot of potential to generate multiple opinions and claims discussions is workers' compensation. It's commonly understood that workers' compensation will pay when an employee becomes ill from an occupational disease. An occupational disease is related to your workplace and caused by, or aggravated by the conditions of your employment. Contracting a cold or flu at work would typically not be considered an occupational disease, as it is common to just about anywhere. In comparison, a worker who contracts debilitating respiratory issues from working around silica may be considered to have an occupational disease.

Health Insurance

From the medical insurance perspective, we are seeing some carriers promoting the use of telemedicine options for initial consultation. The incentives and availability for using telemedicine can vary from carrier to carrier. Please consult with your benefits plan advisor for more specifics about your plan.

Anticipating every situation or scenario is not possible in this short commentary. Nor should the above comments be considered as an absolute statement about how your coverage may or may not respond. We encourage our clients to contact us with questions regarding this still-evolving situation.

Coverage Cancellations and Non-renewals

Insurance carriers are striving to help clients minimize disruption and are making decisions with guidance provided by state regulators. Many of the carriers we work with are communicating that they will place a hold on cancellation and non-renewal notices for insureds that advise they cannot pay their premiums due to events related to coronavirus. Insureds are encouraged to contact their insurance carriers directly, or your agent and account manager at The Koch Co., to request accommodations or discuss premium payment options.

We're Here for You

We have an established business continuity plan in place to remain in operation while maintaining the health and safety of our employees, clients, and the community. We will continue to be available to discuss your specific situation, questions, and concerns.

Legislative Updates & Compliance

Legislative and compliance updates are changing daily. Review recent updates and announcements.

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Everyday prevention methods like hand washing, staying home when you're sick and practicing social distancing are helpful ways to reduce the spread of the virus.

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Risk Management & Loss Control

As this risk appears to be one that may not be transferred to an insurance carrier, it is important to identify and implement risk management procedures to avoid or minimize the impact.

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Benefits & HR

As an employer, you want to protect your employees from health and safety hazards, and part of that includes communicating how to best use their benefits and how these programs are changing to respond.

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Business Planning & Response

This new and challenging situation has prompted the need for innovative and unique responses to support your employees and risk management plans.

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Helpful Links

The CDC, US Department of State, and The World Health Organization are helpful links for a range of information about the Coronavirus. Our local Nebraska Medicine also has helpful information and daily updates.

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