The coronavirus pandemic is devastating to the global economy. Media outlets around the world have reported the impact of the COVID-19 virus is impacting almost every industry in the United States and around the world.
In addition, the insurance industry is making cutbacks on the types of coverages they offer for pandemic diseases and have put new or broadened exclusions into their policies.
However, there are still areas of insurance coverage that exists, and it’s vitally important that you assess how vulnerable your Florida business may be and what insurance coverage you have in place to address losses.
What About My Business Interruption Insurance and COVID-19?
Many Florida businesses have Business Interruption insurance as part of their first-party property insurance or as a separate insurance policy.
In general, business interruption insurance in Florida protects you against losses due to your business operations being suspended due to some type of property damage.
Most of the time, contagious diseases are not considered property damage. However, actual contamination of your tangible property, such as a fear of contamination, may meet the definition of property damage for your insurance purposes.
Additionally, if your business property was contaminated and you are forced to shut down, your business interruption insurance may kick in, but there are limitations that include:
- Some insurance companies have added exclusions for bacterial or viral infections in their policies. The Florida insurance claim attorneys at Stevenson Klotz have seen both stand-alone bacterial exclusions and bacterial/viral exclusions. However, you should understand that bacteria is not a virus. If you have an exclusion in your insurance policy, you may still have coverage for COVID-19.
- Insurance companies sometimes argue that their standard pollution exclusions bar you from recovering any damages. However, the question as to whether viruses or bacteria are pollutants is up for debate, and up to now, there isn’t a hard and fast rule that applies.
What About My Supply Chain Insurance and COVID-19?
Depending on the type of Florida business you are in, you may have purchased supply chain insurance or Contingent Business Interruption insurance to protect you and your business against any losses that arise from your supply chain being disrupted in some manner.
Normally, these types of policies exist to cover your business against an interruption in raw materials, parts, and/or supplies.
Contingent Business Interruption insurance generally will cover your economic losses, which may include increased costs, local and/or reduced operations that are a result of physical damage to the premises of your suppliers.
In addition, some supply chain and Contingent Business Interruption insurance policies could cover any loss of services to your business, such as loss of utilities.
Supply chain insurance generally covers:
- Any losses that arise from disruptions from specific suppliers that are scheduled in your policy; and
- Your supply chain insurance may require that your supplier suffered the type of property damage that would be covered by your first-party insurance policy. This would require actual contamination.
What About My Event Cancellation Insurance and COVID-19?
Many companies throughout Florida carry a specialized type of event cancellation insurance coverage. This insurance policy generally exists in such industries as sports, entertainment, and event planning.
In addition, your policy could be written in such a way that it includes specific coverage against cancellation because of infectious diseases such as the coronavirus.
If you purchased express coverage for infectious disease cancellations, you should check your policy to ensure a coronavirus exclusion hasn’t been added to your policy without your express consent.
What About My Liability Insurance and COVID-19?
In Florida, you may be facing a risk of liability for failing to protect others from exposure to infection while they are at your place of business. Transportation, hospitality, and health care workers and retailers are the most vulnerable for this type of claim.
Your general liability insurance should cover any liability for bodily injury and property damage, and in general, your primary Commercial General Liability policy should provide you a legal defense to this type of claim.
You could also be facing claims for losses that don’t involve bodily injury or property damage, such as a claim based on failure to meet a duty of care that may be covered in your Errors and Omissions insurance policy.
What About My Worker’s Compensation Insurance and COVID-19?
In Florida, worker’s compensation insurance may cover your employees who suffer an injury or illness while at work. Coverage is based on “work-related” injuries and is analyzed based on what time the loss occurred, the place the loss occurred, and the specific activity your worker was engaged in at the time of the loss.
The best time to plan for exposure to an infectious disease is before it actually happens. This preparation should include assessing your risks and assessing your insurance coverage before it comes into play. The Florida personal injury attorneys at Stevenson Klotz are poised to assist you with your business interruption insurance needs.