COVID-19 Insurance FAQ

In General

The novel coronavirus (COVID-19) continues to have an unprecedented effect on business operations throughout the world. At Embroker, all of our teams are operating full speed ahead so there will be no impact on providing services to our clients. Additionally, we have deployed our Embroker Preparedness Team to respond to your questions and offer support as your business navigates COVID-19. We are also in constant contact with our carrier partners and resource leaders to bring you as much information as possible. Remember you can access your insurance policies anytime in your account on www.embroker.com. You can also manage your insurance needs such as requesting certificates of insurance, endorsements or other coverage changes, as well as renewing coverage or applying for any new coverage needed.

We invite you to check back with us regularly for updates. In the meantime, we hope that you, your company and your community remain healthy, strong, and united during this time.

General Questions, Preparedness, and Response

How can I prepare my workplace during the COVID-19 pandemic?

There are many resources available to help plan, prepare and work to prevent the spread of COVID-19, and most of them will guide you to the CDC, OSHA, and the EEOC. All of these have published resources to help employers plan for and address these challenging times. Industry associations also have information specific to certain types of businesses such as the National Restaurant Association, American Medical Association, National Association of Realtors, and the National Retail Federation. The U.S. Small Business Administration is also a great resource.

What do you know about COVID-19 and any potential insurance coverage?

In the FAQs that follow, you’ll find additional information. At this time, most insurance carriers are taking a conservative approach and not commenting directly on coverage or the potential for coverage for claims related to COVID-19. What we do know is that any claim submitted will be reviewed, responded to and adjusted according to the specific facts of the claim, the policy language, and applicable state law.

What should I do if (I think) I have a claim?

Please report it to your insurer. Timely reporting is of the utmost importance to preserve your rights under your policies. We encourage you to report any and all claims directly to your insurer(s) as soon as practicable and in accordance with your policy terms.

Where do I find my claims reporting information?

This information is included in your insurance policy, typically in the Declarations section (the first few pages). As an Embroker client, you can view your policy/ies online anytime in your Embroker Account by signing in and visiting your “Policies” in the top ribbon.

Are there endorsements or exclusions I should be aware of in my policies?

We encourage all insureds to review their policies, which you can do anytime in your Embroker Account. Terms to look for include, but are not limited to: virus, disease, communicable disease, bacteria, fungi, mold, contamination/contaminated, and pandemic.

I have seen articles or other postings where law firms or other parties are saying there could be coverage for COVID-19 – are they wrong?

There is much speculation about the potential outcomes of COVID-19 losses and claims and many respected sources (i.e. law firms, brokers, industry experts) have provided commentary on the issue. These opinions provide general context about potential insurance coverage and issues insureds may face. However, they are typically careful to qualify their opinions by acknowledging that coverage will ultimately come down to the specific facts of the claim, the policy language, and applicable laws. The only way to know if an insurance carrier will pay out on a claim is to submit it and go through the adjustment process.

Should I submit a claim?

Coverage for COVID-19 will be highly dependent on the specific facts of the claim, the policy language, and applicable state laws. Moreover, actions taken by federal and state authorities in response to this pandemic are continuously changing and may impact insurance coverage. Timely reporting is of the utmost importance to preserve your rights under your policies. We encourage you to report any and all claims directly to your insurer(s) as soon as practicable and in accordance with your policy terms.

You can find your claims reporting information in your policy. If you need additional support, please reach out to ServiceTeam@embroker.com.

Workers’ Compensation FAQs

Workers’ Compensation is the state-mandated insurance policy that covers claims from employee injuries, including medical expenses, death benefits, lost wages, rehabilitation and more.

If my employee has contracted COVID-19, could they be covered by workers compensation?

In general, workers’ compensation claims will be adjusted according to the specific facts of the claim, the policy language, and applicable state law. In most cases, exposure and/or contraction of COVID-19 is not considered to be an allowable, work-related condition. Under certain circumstances, claims from health care providers and first responders involving COVID-19 may be allowed. We encourage employers to carefully consider what is reasonable, prudent and necessary in the duties carried out by their employees and to follow recommended guidelines and orders from government authorities.

How much information can I as an employer request from an employee who calls in sick during the COVID-19 pandemic?

According to the Equal Employment Opportunity Commission, “during a pandemic, ADA-covered employers* may ask such employees if they are experiencing symptoms of the pandemic virus. For COVID-19, these include symptoms such as fever, chills, cough, shortness of breath, or sore throat. Employers must maintain all information about employee illness as a confidential medical record in compliance with the ADA.” We recommend that these conversations be managed by appropriately trained personnel, such as Human Resources/People Operations, General Counsel or you as the business owner.

* The ADA covers employers with 15 employees or more.

Can I take an employee’s temperature?

Measuring body temperature is generally considered a medical examination and, therefore, not an appropriate action by an employer. However, a recent EEOC advisory states that “[b]ecause the CDC and state/local health authorities have acknowledged community spread of COVID-19 and issued attendant precautions, employers may measure employees’ body temperature.” Remember, however, that some people with COVID-19 do not have a fever. Only approved COVID-19 testing can provide proper diagnosis.

Can I require employees who have tested positive for COVID-19 to stay home?

Yes, the CDC states that employees who become ill with symptoms of COVID-19 should leave the workplace. Moreover, federal, state and local regulations, as well as CDC and OSHA and guidelines, are calling for social distancing and self-quarantine to prevent the spread of COVID-19.

Do I need to tell other employees that one of our own has tested positive for COVID-19?

It is best practice to inform others of their exposure so that they can properly monitor and be tested as appropriate. However, employers must follow ADA and HIPPA guidelines to protect the confidentiality of the sick employee. These are stressful times, and while others should know that they have been exposed so that they can manage accordingly, confidentiality should be maintained and respected in compliance with laws and regulations.

When employees return to work, whether or not they were out on workers compensation, can I require a doctor note that says the employee is fit to return?

Yes. Again, according to the EEOC, “such inquiries are permitted under the ADA either because they would not be disability-related or, if the pandemic influenza were truly severe, they would be justified under the ADA standards for disability-related inquiries of employees. As a practical matter, however, doctors and other health care professionals may be too busy during and immediately after a pandemic outbreak to provide fitness-for-duty documentation. Therefore, new approaches may be necessary, such as reliance on local clinics to provide a form, a stamp, or an e-mail to certify that an individual does not have the pandemic virus.”

Commercial Property FAQs

Commercial Property insurance is designed to protect all property vital to the daily operation of the business, covering not only offices but also any other physical assets important to the company. Such policies may also respond to loss of income or business interruption that results from a physical damage to property by a covered cause of loss.

Are there endorsements or exclusions that I can find in my property policy that specifically address COVID-19?

For insurance policies issued prior to the COVID-19 outbreak, there was not an endorsement or exclusion that specifically names COVID-19 in coverage terms because that strain of coronavirus was not known or classified. However, most Insurance Service Office or “ISO” property insurance policy forms contain exclusions for losses arising out of virus or bacteria. How these exclusions may be tested as a result of COVID-19 claims remains to be seen.

In February 2020, ISO provided two endorsements addressing COVID-19 which provide business income or extra expense coverage for loss from civil authority orders related to coronavirus. (See link.) These endorsements are substantially similar to endorsements ISO made available in 2014 in response to the ebola crisis, basically replacing “ebola” with “coronavirus.” However, we are not currently aware of any insurers who have filed these forms for use in their policies.

Do I have Business Interruption/Business Income coverage for losses related to COVID-19?

In general, business interruption insurance is intended to protect against “direct physical loss” of or damage to insured property by a covered loss. If property has been damaged, resulting in a loss of business, then you should consider filing a claim with your property insurer. For COVID-19 related claims, insurance carriers may dispute whether a “direct physical loss” has been sustained. Some states have expanded the definition of “direct physical loss” to include contamination or other causes which render something unfit for its intended use; others have not.

Does my property policy have coverage for contingent business interruption?

With regard to supply chain and contingent business interruption, For most small businesses, coverage under a property policy is unlikely. Contingent business interruption coverage or “contingent BI” is not part of the standard property policy form. If you do not see this coverage specified in your policy Declarations or on a specific endorsement, it’s unlikely that there is such coverage. Contingent BI may be found in some policies – particularly those of larger companies with manuscript language. Typically such coverage is subject to a large retention and a specific sub-limit of the overall policy limits.

While we cannot offer legal advice or opinion, you may want to consult your contracts and qualified legal counsel to see if there are clauses or terms that may help mitigate loss or allow your company to recover from lost business.

I’ve heard mention of “Civil Authority” in regards to Property and Business Interruption/Income coverage – what does this mean?

Civil authority coverage typically provides cover when, as a result of a covered peril, access to your business is prohibited by a civil order and resulting business income ensues. Some policies may tie coverage back to a “direct physical loss,” but others may not. Similarly, some policies require that access be prohibited while others require only that it be impaired. The specific policy language and the extent of any civil order will need to be carefully analyzed to determine coverage. Typically such coverage is subject to a deductible and a specific sub-limit of the overall policy limits.

For those with overseas operations, another avenue to explore is whether your policy has “political risk” coverage which may cover actions taken by foreign governments.

Can I make a Business Interruption or Business Income claim if I’m a start-up that’s pre-revenue?

Referring back to the general concept that most property policies require “direct damage” to property from a covered cause of loss which results in loss of income. Pre-revenue companies may not have “revenue” or “income” loss that can be proven as the basis of the claim. How the policy defines damage will be key in determining coverage in such circumstances.

If you have additional questions regarding potential coverage or need additional support, please reach out to covid19@embroker.com.

General Liability FAQ

General liability insurance protects your business against claims of property damage and bodily injury, covering legal costs, associated medical costs, and potential indemnity to the injured party.

What do I do if someone claims bodily injury or property damage, or alleges loss due to COVID-19 caused by my business?

This is a very difficult question, made even more so by the unprecedented nature of the current state of events. Laws and regulations are not entirely clear, and currently, the insurance industry has not put forth guidance in this regard. If a claim is made related to the virus, it will be adjusted according to the specific facts of the claim, the policy language, and applicable state law.

Most important is ensuring that any such claims, circumstances or allegations are reported to the insurer(s) in accordance with the policy terms. Particular attention needs to be made to those general liability policies which are “claims made” or “claims made and reported.” These policies have specific requirements for when and how a claim needs to be reported.

If you have additional questions regarding potential coverage or need additional support, please reach out to covid19@embroker.com.

Directors & Officers Liability FAQ

Could a D&O claim arise out of COVID-19?

D&O policies are designed to respond to claims of wrongful acts that result in financial loss. In general, the breach of fiduciary duty as a director or officer is considered a wrongful act under most D&O policies. However, what might be considered a wrongful act in connection with COVID-19 is not clear at this time.

One potential area which could implicate D&O coverage would be allegations that the company’s directors and officers acted unreasonably in response to COVID-19. Some examples which could theoretically form the basis for potential D&O claims would be shareholder lawsuits that allege failure: (1) to develop and implement adequate emergency response plans; (2) to observe CDC guidelines and recommendations; (3) to ignore shelter-in-place or other civil orders; or (4) to not properly disclose the financial implication of the pandemic on the business.

Most important is ensuring that any such claims, circumstances or allegations are reported to the insurer(s) in accordance with the policy terms. Particular attention needs to be made to those general liability policies which are “claims made” or “claims made and reported.” These policies have specific requirements for when and how a claim needs to be reported.

If you have additional questions regarding potential coverage or need additional support, please reach out to covid19@embroker.com