Virus

Usually I try to come up with a catchy title for my blogs, but Covid 19 is too serious a matter to joke about. We know its effects on our health and the economy, but it also has had a great influence on the insurance industry both now and in the future.

The Industry has been criticized for not providing business interruption for businesses that have had to shut down or limit their operations. The provision in the property policy states that there has to be ”physical damage” to property before business interruption can be considered. There has been a groundswell of legal challenges to the definition of physical damage and even Congress has threatened to intervene in this matter. If the Insurance industry is forced to pay on virus related losses of income, expect to see a lot of Insurance carriers going bankrupt.

So far there seems to be no restriction on the liability side, so if a business is sued for a sickness as a result of not providing a safe environment, there should be coverage. I say “so far” and “should be” because this could change or may have changed already in some instances so every business owner should check to see if their carrier has (snuck in) a virus exclusion for liability. It would not be unusual to see the inclusion of a communicable disease exclusion endorsement for liability. Although it could be argued that the virus is a communicable disease, this exclusion specifies that the disease has to be “transmitted”. This to me is not a virus exclusion, but the subject should be discussed with your agent/carrier for their position on this.

The Insurance Industry is an important ingredient in our financial stability. The Virus poses unique challenges going forward.

For more specifics on this article or other insurance matters contact the author, Guy Hatfield, at ghatfield@hatfieldinsuranceagency.com.