Traditional property and casualty insurance policies have little, if any, coverage for outbreaks and epidemics like the coronavirus, but additional coverages might respond to infectious diseases in specific circumstances. These could include:
- Workers' Compensation
- Property and Business Interruption
- Professional Liability
- Pollution Liability
While virus and bacteria is almost universally excluded on all insurance policies, policy language for each type of policy needs to be examined based upon your circumstances to determine coverage. If your business has been impacted by the coronavirus, you need to work closely with your agent and claims consultant to review your coverage.
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Potential Policy Coverage
The financial effects for business around the world will be substantial and long-lasting, but some insurance policies may cover some losses. Availability of coverage will depend on each policy's wording and the circumstances of each claim.
Potential policy coverages may include:
Property insurance is typically triggered by physical loss or damage caused by an insured peril, which typically does not include disease or viruses. However, certain types of businesses or those impacted by previous worldwide diseases such as SARS or Ebola may include specific extensions such as interruption by communicable/infectious/contagious diseases. Also, property policies often have limited pollution or pollution clean up coverage which might also respond.
Losses covered may include:
- Loss of income
- Extra expenses
- Crisis response
- Cost of decontamination
Business Interruption or Contingent Business Interruption
Business interruption claims are complex and may cover a broad range of non-damage risks that require the suspension of operations, including:
- Infectious diseases
- Denial of access
- Loss of attraction
- Customer and supplier extensions
*Keep in mind however that a covered physical loss is almost always the trigger to this coverage.
Environmental or Pollution
Environmental or pollution policies may include viruses or bacteria as pollutants, especially for industries such as healthcare. Coverage may include:
- Clean up costs
- Business interruptions from clean-up
Likewise, depending on the class of business, coverage restrictions may include communicable disease, coverage sublimits, and/or a requirement that the virus or bacteria be facility-borne.
If an employee came in close conduct with someone infected with the coronavirus during the course and scope of employment, it could become a work comp claim. Employers may be responsible under the following conditions:
- Employee traveled overseas for business and contracted the illness.
- Employee is exposed to the illness at work by an infected coworker.
- Employee is assigned to work in a location with infected parties.
Preventing potential workers' compensation claims by protecting your workforce through CDC recommended strategies.
*The nexus of the contagion and the employee likely would have to be more than just a co-worker relationship for it to be considered a covered comp claim.
General Liability and Umbrella/Excess
Typically insurers take the position that general liability policies only include actual injuries, personal injuries, or claims by third parties that an insured has caused property damage or physical injury. These often contain broadly-worded exclusions for pollution contaminants, which could include viruses.
Umbrella policies are generally broader and may cover potential claims that primary coverages exclude. This could potentially include crisis response coverage.