It’s an unprecedented time in our country. Coronavirus disease (COVID-19) has arrived in the United States. Schools are closing for several weeks, large events have been cancelled, stores are running out of supplies and mass pandemonium has begun.
Naturally, we’re getting questions about Ohio insurance coverage for this virus. So let’s take a look at the most common questions we’ve been asked. Please note, this is by NO means an all-inclusive list of possible insurance types or situations, but the most common questions we've been asked. Perhaps they're questions you've thought about as well.....
Does by Business Liability insurance cover coronavirus?
First up, Business Liability insurance, also referred to as Commercial General Liability insurance. Commercial General Liability is the core of business insurance, covering bodily injury and property damage to others as a result of your business operations.
In order to pay those bodily injuries and/or property damage, you must be NEGLIGENT. “Negligence” is defined as the failure to exercise the degree of care required of a reasonable and prudent person in any given circumstance resulting in injury or damage to another. As a general rule- negligent = at fault (and thus legally liable) .Not negligent = not at fault (and not legally liable).
So, could a business be found negligent? It’s certainly possible. But the claimant would have to prove that the virus was contracted due to the insured’s negligence and give specific details as to the what, when, how and where. That could be difficult.
Since this virus is new and insurance companies are still trying to figure out coverage, you may be required to submit a claim so they can investigate and make a coverage determination.
Will my insurance cover if I’m forced to close to my business due to the coronavirus?
So if a business must close temporarily that business is concerned about the loss of income. Loss of business income means loss of income and/or rental income you sustain due to partial or total interruption of business resulting from loss or damage to property listed from a peril insured against.
The most important part here is the loss or damage to property listed from a peril insured against. This is DIRECT, PHYSICAL loss. For example, a fire or tornado (both are perils) renders you unable to operate in your location. These perils are specifically named in the policy. If Peril “X” happens, then you have coverage.
So, in many instances, there may not be coverage because there hasn’t been direct, physical loss as a result of a covered peril.
Again, some are arguing otherwise. My advice is the same- you may be required to turn in a claim for the insurance company to investigate and determine coverage. Again, contact YOUR insurance company for guidance.
Will my homeowners insurance cover coronavirus?
It’s unlikely, but possible. The following exclusion lays it out:
“We” do not cover under Bodily Injury Liability Coverage, Property Damage Liability Coverage, Personal Injury Liability Coverage and Medical Payments To Others Coverage: “bodily injury,” “property damage” or “personal injury” arising directly or indirectly, in whole or in part, out of the actual, alleged or threatened inhalation of, ingestion of, contact with, exposure to, existence of or presence of any “fungi,” wet or dry rot or bacteria.
Again, when in doubt, contact YOUR insurance company. Again, they may say you have to submit a claim so it can be investigated properly.
And lastly, how about my auto insurance?
Again, a similar exclusion to the homeowners policy exists.
We do not cover: bodily injury or property damage arising directly or indirectly, in whole or in part, out of the actual, alleged or threatened inhalation of, ingestion of, contact with, exposure to, existence of or presence of any “fungi “, wet or dry rot or bacteria.
As you can probably tell, this virus has introduced a lot of GRAY areas in the insurance world. Determination of coverage is NOT always straightforward. When in doubt, ask questions.
And please note, we’re just starting to think about insurance implications. If claims are submitted in the volume I expect, then it’s possible that our systems may get overwhelmed (similar to the medical field right now). It may take time to investigate and gather information and make a decision. And remember, you may to turn in a claim to find out whether or not you have coverage.
These are difficult times and we’re all just trying to do our best. Be smart and safe.
To make sure you’re properly protected in the future, you need a qualified insurance professional. Call us or request your quote today.