Here at the Small Business Development Center, we are able to reach out to a wide range of partners to provide us with a greater depth of information in their specialty topics.
In today's message, we are thankful to hear from
Waite, CIC, CPRM, CRM
Neckerman Insurance Services
Ryan helped us understand more about some of the many changing pieces in the insurance world as of today (March 26, 2020). This information is intended to help you better understand common questions; please reach out to your insurance agent if you have detailed questions about the policies you have in place.
What should small businesses consider with business processes changing so quickly?
- Cyber risks: A number of small businesses have transitioned their workforce to work remotely from home. Since this was a quick transition, there may be some cyber insurance risks that should be reviewed. Here’s an article we at Neckerman wrote about managing remote work cyber risks.
- Delivery drivers: Some restaurants have started to offer delivery with the Safer At Home shut downs.
- The Wisconsin Insurance Commissioner has now ordered all companies that insure restaurants to extend coverage for Hired and Non-Owned Auto Liability coverage to those restaurants. This coverage protects the business from a car accident in which their driver is at fault and the driver’s personal insurance doesn’t cover the extend of the damage.
- Please note that even though the insurance carriers have been required to offer the coverage, each carrier will have different eligibility guidelines.
Do I have coverage for COVID-19 under business interruption?
Insurance agencies are not claims adjusters, so if a business feels they have a claim, they can file it with their insurance carrier. The insurance carrier will evaluate every claim individually to determine whether there is coverage based on the policy language and coverage forms.
That said, there typically needs to be physical damage to the property from a covered cause of loss for this coverage to apply. One possible example could be if it was proven that the COVID-19 virus infected the property, which then had to be evacuated and sanitized. That said, most insurance carriers don’t consider this a direct loss because their policies exclude virus and bacteria as a cause of loss.
What should business owners talk to their insurance partners about?
There are many businesses that have had to lay people off and close up shop. It’s a terrible situation, and insurance companies are doing what they can to help on the billing side. Some possible options to discuss with your agent:
- Changing your premium payments from annual to monthly
- Pushing back your payment due dates
- Deferring the minimum that is due
- Requesting a payment extension
Many carriers are also extending their “grace periods,” not charging late fees, offering more flexibility on cancellations due to non-payments and reinstatements, longer payment terms, etc. One carrier even stated that “if a policyholder is unable to pay their premium due to COVID-19, their policy will not be canceled for nonpayment.”
As each business situation is unique, it is best to talk to your insurance agent and then the billing representative of your insurance carrier for additional flexibility. Toll-free numbers for billing questions should be listed on all invoices.
Any additional tips to get through these tough times?
Many liability and Workers’ Compensation policy premiums are based on estimated sales and payroll. If your current policy estimates of sales and/or payroll are now lower due to the closing of your business, discuss that change with your insurance advisor, as it could provide some immediate relief toward the cost of insurance. Depending on the industry, this could lower the premium for your business drastically to help you weather the storm.