COVID-19: Impact on Business & Personal Insurance Coverages

At Cheney Insurance, we are committed to you.  This situation is new to us too, so we are closely working with our carriers to identify and educate ourselves on how this is impacting our clients.

Below are questions you may have during this time.

My business is closed due to COVID-19, does my business interruption insurance cover loss of income?

Business interruption insurance covers a business’ loss of income resulting from a disaster.  Whereas property damage only covers physical damage to a building, business interruption insurance covers the loss of income during the disaster and rebuilding period.

Unfortunately, closures from viruses, including COVID-19, are not typically covered under business interruption insurance because in order to be covered, the interruption must be caused by or result from a covered loss, which includes only physical loss or damage.

Even though we think that in most cases insurance won’t cover loss due to a COVID-19 closure, it may be worthwhile to file a claim.  Our carriers have informed us that each claim will be reviewed individually and adjusters may decide that some detail may make a business eligible for coverage in certain situations.

Note: If your small business is affected by the COVID-19 outbreak, the Finance Authority of Maine (FAME) is partnering with U.S. Small Business Administration and local Maine lenders to offer special, limited time loans and loan insurance to eligible Maine businesses affected by COVID-19 (pdf).

Does my commercial property insurance cover any losses due closures resulting from COVID-19?

Commercial property insurance covers losses or damage resulting from incidents such as fire, theft, or natural disaster.

These insurance policies generally include an exclusion of loss due to virus or bacteria which states:

“We will not pay for loss or damage caused by or resulting from any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease.”

Because of this, commercial property insurance will most likely not cover any virus-related losses.

Does workers comp cover employees who are now working from home?

Workers’ compensation insurance accepts work-related claims, whether they occur at the office, during a business trip, while traveling, during an out of office meeting, or at home.

This means if an at-home employee gets injured while performing a work-related task, he or she would be paid medical expenses and lost wages.

However, simply getting hurt during work hours at home doesn’t make someone eligible for workers’ compensation benefits. The claimant must prove the injury was caused from a work-related task.

My business is now offering delivery services, am I covered?

With new government restrictions and social distancing standards, many businesses who have not previously offered delivery services are doing so now.

Adding delivery to your operations changes your business exposures, so you may need to adjust your business liability and business auto coverages to cover the new exposures.

Changes will depend upon whether company-owned vehicles or employee-owned vehicles are used and whether employees are already listed on your commercial auto policy.

Because each scenario is different, we highly recommend you give your insurance agent a call to make sure your business is protected.

Do I need to increase my commercial property insurance if employees are taking business equipment home?

Commercial property insurance covers a business’ property, whether it is within the walls of the business or elsewhere.

If an employee brings work equipment home, it is covered under commercial property insurance, however business owners may want to increase their “off-premises” coverage to ensure that any materials employees are taking off the premises are covered.

Do I need to put my child back on my auto policy since they were sent home from college due to COVID-19?

Many parents choose to exclude their children from their auto policies while they are away at school, because they aren’t living at home and aren’t driving.

If this is the case for you, yes, you should certainly add them back to your policy.

Any licensed driver living in your home should be listed be on your automobile policy. If they are not on the policy and are involved in an accident, there may be no coverage.

We’re Your Neighbor

Insurance companies are still navigating the various situations resulting from this unforeseen pandemic.

In the coming weeks, Cheney Insurance will continue to monitor COVID-19 developments, collaborate with our insurance carriers and adopt creative solutions to serving our clients’ needs.  Please do not hesitate to call us if you have any questions, we are here to help.

Let’s keep in touch and check out our facebook page for updates.