COVID-19 Resource Center

Last Update: February 3, 2021 | 08:30am

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Navigating COVID-19’s Impact on Business:

Commercial Insurance & Employee Benefits Guide

A simple Google search of “coronavirus business insurance” results in millions of recent press releases and articles providing information from various sources on how corporate insurance policies and employee benefit programs will respond, or not respond, to claims related to the novel coronavirus, COVID-19. The intent of this post is to provide our clients, partners and community with a centralized location to find updated resources, guidance and best practices to help enable them to make the most educated business decisions possible during these uncertain times.

Disclaimer: Please keep in mind this is a fluid and unprecedented situation. The guidance offered is based on information available today, but this global event will likely result in case law that will set new precedents in our industry.

Update: Due to feedback from business owners, non-profit executives, and other insurance professionals kind enough to share their experiences, we have included a “Questions/Comments/Feedback” form at the bottom of this post. Please utilize this form if you would like to share your thoughts and experiences.

Commercial Insurance Policies

As businesses and non-profit organizations turn to their property & casualty insurance policies to review coverage for incidents and claims stemming from the COVID-19 virus, there are specific policies and limits that are called into question. Here we review how losses might be treated under those policies:

  • Commercial Property Insurance - Business Income, Interruption, Extra Expense

    In an effort to prevent the spread of COVID-19, businesses have been forced to voluntarily or involuntarily suspend their operations. Many have asked whether their commercial insurance will provide Business Income, Interruption or Extra Expense coverage. It is important to note that these coverages are ordinarily found under a business’s property insurance policy. Most property coverage forms state that the loss of income due to the suspension of business operations must be caused by direct physical loss of, or damage to, property at the insured location or at a location that the insured is dependent upon (i.e. a supplier). Because the virus is not causing a direct loss to physical property, the Business Income/Interruption/Extra Expense coverage would not be triggered. Likewise, the “Civil Authority” clause of most commercial property policies, which extends business income coverage in the event that a Civil Authority prohibits access to your premises, must be initiated by a direct physical loss of or damage to your insured property.

    Other business income coverages such as Contingent Business Income, Ingress/Egress, and Supply Chain Disruption will also likely be examined in the wake of this global event, however these provisions also generally require that the loss of income must stem from physical loss or damage.

    UPDATE: New Jersey Legislature Considering Bill To Force Insurers To Pay COVID-19 Business Interruption Claims Expressly Excluded By ISO’s “Virus” Exclusion

  • Workers Compensation

    Domestic workers compensation insurance provides coverage to U.S.-based employees for both bodily injury by accident and bodily injury by disease. However, any bodily injury by disease must be caused or aggravated by the conditions of employment. Therefore, with the exception of healthcare professionals treating individuals infected with the COVID-19 virus, it is unlikely that a workers compensation policy will provide coverage for COVID-19 claims. Global organizations should review their foreign voluntary workers compensation policies for more information regarding specific state or country-of-hire benefits.

  • Commercial General Liability

    As the incidences of COVID-19 related illness increase, businesses—particularly those in the healthcare or hospitality industry—could also face claims brought by infected patients or guests alleging the company’s failure to exercise reasonable care in guarding against, or warning of, the risk of exposure to COVID-19. Intended to protect businesses against third-party claims for bodily injury resulting from exposure to harmful conditions, commercial general liability insurance policies should respond with coverage for these claims.

Our commentary above is a general interpretation of common insurance policy provisions.

We strongly recommend that businesses currently being negatively impacted by the effects of this pandemic take the following measures:

  1. Review your current policies in detail. Consult with your insurance advisor to understand each policy’s unique features: endorsements, enhancements, exclusions etc.

  2. Document everything! Take a detailed account of every potential claim or loss scenario.

  3. Consult with your business’s insurance or benefits advisors to determine if and when claims should be submitted.

While there is no guarantee that something will be done, it is conceivable that as this global situation advances, special government loans or subsidies may emerge in which case this detailed information would be critical.  If, at some point in the future, any type of Federal or State government subsidy program becomes available that might provide reimbursement for a portion of these expenses and lost revenues, only clients with accurate, detailed and well-documented records will be considered.  This should be part of the steps you are taking as a response to this crisis.

Employee Benefits, Human Resources & Compliance

  • Group Medical Insurance

    As COVID-19 continues to spread, many employees are wondering whether there is coverage under their company-sponsored medical plan. The following provides some high-level information intended to address these inquiries. This information is up to date (as of March 16, 2020) is general in nature, and subject to change. According to the CDC, individuals who feel sick with fever, cough, or difficulty breathing, and have been in close contact with a person known to have COVID-19, or who live in or have recently traveled from an area with ongoing spread of COVID-19, should call their healthcare professional, or utilize the TeleHealth or virtual care services available to them via their medical insurance carrier. The healthcare professional will work with the state’s public health department and the CDC to determine if the individual needs to be tested for COVID-19.

  • Is the COVID-19 Test Covered?

    In most traditional group health plan arrangements, testing for COVID-19 should be covered like other diagnostic tests (e.g., the flu test or rapid strep test) when medically necessary. Non-traditional group health plans (e.g., skinny plans, some reference-based pricing arrangements, and short-term limited duration insurance) may not provide coverage.

Please see below links for more detailed information on how each medical insurance carrier is covering diagnostic testing and ongoing care specifically related to COVID-19:

Aetna

AmeriHealth

Cigna

CareFirst

Horizon BCBSNJ

Independence Blue Cross

UnitedHealthcare

  • Group Short-Term Disability Insurance

    Will a COVID-19 diagnosis trigger a short-term disability benefit?

    Per the CDC, reported illnesses associated with COVID-19 range from mild symptoms to severe illness. Therefore, each employee will need to be evaluated on a case-by-case basis, depending on the individual’s condition and the definition of disability under the terms of the plan. For example, someone who is asymptomatic but asked to stay home may not be eligible for disability benefits while someone who is hospitalized would be eligible. Employees in California, Hawaii, New Jersey, New York, Rhode Island and Puerto Rico have access to state mandated disability leave.

    The specific contract provisions within group short-term disability policies can vary greatly based on group size and carrier. Please consult with your company HR resource or your health insurance broker for information or questions concerning your specific policy.


  • COVID and the Family and Medical Leave Act (FMLA): On March 14, 2020, the U.S. House of Representatives passed the Families First Coronavirus Response Act (“Act”) by a vote of 363 to 40. It requires employers with 500 or fewer employees to grant FMLA leave due to COVID-19 and up to two weeks of paid sick leave for absences related to COVID-19. To help employers pay for it, the Act grants employers refundable tax credits. The Act also expands unemployment benefits due to COVID-19. It will sunset at the end of 2020. Click here for more info

Assistance Programs for Businesses

As the pandemic forces businesses to limit or completely cease operations, federal and local governments are providing and proposing additional financial assistance aimed to help relieve the burden of sharp revenue declines currently being felt by businesses across all industries.

Here is a link to an Inc. Magazine article that will be continually updated as additional resources become available: Click here for more info



Additional Resources:

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