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Why You Should Look at Your Business Insurance Policy Differently After COVID-19

Two business owners discussing their insurance policy with a lawyer.

The coronavirus pandemic has affected businesses in unprecedented ways. Companies have been forced to lay off employees and shut down their businesses. Will insurance cover these losses? How should companies look at their business insurance policies after the pandemic? This article has answers.

Does Insurance Cover COVID-19 Related Losses?

This depends on a number of factors, including:

  • The kind of loss you suffered
  • The type of insurance coverage you have
  • Your insurance carrier's policies

In general, there is no formula to tell whether your insurance will cover your particular losses. The only way to see if your policy will cover your claim is to review your state's laws and the terms and conditions of the coverage.

Insurance Policies That May Cover Your Losses

The following are some of the policies that may help you recover some or all of your losses from your insurance company:

Business Interruption Insurance

Some policies give coverage if you suffered financial losses because your business was interrupted. This interruption needs to be because of direct damage to the property insured. In such cases, your insurance might cover your net income and other expenses required to run the business.

It will be difficult to get business interruption insurance because of COVID-19 because the pandemic did not cause direct physical damage to your property. The actual laws may vary from one state to another, and laws are quickly evolving in this regard. So, make sure to do your research to know what actually qualifies as "physical damage."

Workers' Compensation

A workers' compensation insurance policy may cover bodily injury claims brought by employees. But these insurance policies may not cover diseases to which the general public is also exposed. Make sure to review the exact terms in your insurance policy if your employees get infected with COVID-19.

General Liability Insurance

General liability insurance policies generally cover bodily injury and property damage caused to third parties on the insured premises. If a customer or any third party is injured because of the business owner's negligence, this insurance will likely cover the cost of the injury.

In the context of COVID-19, third parties may be able to assert that the business owner had been negligent because they did not exercise reasonable care to safeguard them or did not warn them of the risks of exposure.

What Should You Do as a Business Owner?

If you are a business owner and have suffered losses because of COVID-19, your insurance may cover some or all of your losses. To ensure you get the best deal, do the following:

  • Have an experienced insurance attorney review your insurance policy to see what is covered
  • File an insurance claim following deadlines set in your insurance policy
  • Gather all important information and documents that support your claim
  • Make a sworn proof of loss within the required time frame.

What Should Business Owners Do in the Future?

COVID-19 is greatly impacting small businesses, and questions as to whether insurance companies will cover their losses are being litigated in courts all over the nation. As insurance law is mainly a state issue, what you can do to protect your rights in the future will vary depending on where you live.

Generally, however, small businesses should get legal advice from an experienced attorney. They, along with their attorneys, should review the policies and try to renew their policies to include coverage of events like this.

Additional Resources

Not Sure If Your Insurance Covers a Coronavirus-Related Loss? Speak to an Attorney

There are currently many issues raised with insurance coverage to COVID-19-related losses. If your business has suffered a loss, you may qualify for insurance coverage depending on the specifics of your case. You should consider speaking to an insurance attorney regarding your coverage and how best to protect your rights.

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