As your agency faces the difficulties of COVID-19, we know how important it is to get current and correct information regarding how COVID-19 affects both your clients’ coverage and your agency as a whole. HawkSoft would like to provide some basic information and resources we’ve found helpful in 3 major areas of focus for your agency in these unprecedented times. Read the full article or click the quick links below to go directly to the resources we've curated.
- Legislation impacting your agency
- Business continuity
- Affected coverage
- Overview of affected coverage lines (Insurance Journal)
- Business Interruption resources
- Workers' Comp resources
- Event Cancellation resources
- Other coverage resources
Legislation impacting your agency
As the federal and state governments respond to the pandemic, legislation affecting both businesses in general and insurance agencies specifically is changing rapidly. For example, many states have imposed moratoriums on policy cancellations and nonrenewals due to nonpayment. It’s important to stay abreast of news such as this and communicate it to your clients as required.
If you haven’t already, we recommend joining a network or association in your state (such as Big I or PIA) or following your state’s Department of Insurance to receive updates and resources specific to your state. You can also go to the National Association of Insurance Commissioners (NAIC) to see bulletins and actions related to COVID-19 by state.
Make sure your agency has the resources you need to operate under the constraints of COVID-19, whether your staff is working remote or you are making accommodations for necessary distancing in your office. HawkSoft’s Work from Home Resource Hub links to resources that will help your agency equip itself for both the technical and social aspects of working from home. In addition, ACT offers disaster planning resources for agencies, and Corporate Risk and Insurance and Agency Nation give tips for maintaining business continuity during COVID-19.
Another thing to be aware of while working remotely is the increased cybersecurity risk to your agency’s data, due to employees working on personal equipment and possibly on unsecured networks. LCG-Global (provided by Big I) and Comparitech give tips for preventing and detecting threats to a remote work environment.
Lastly, during this time your agency may be able to benefit from the Paycheck Protection Program. PIA’s guide explains the parameters and how to apply.
One of the most important things your agency can do right now is understand and advise your clients on how COVID-19 impacts different risks and coverages. This can be a moving target, with new legislation and lawsuits happening every day, but below we’ve included some of the areas that are most affected by the pandemic, with some resources on each. Insurance Journal also gives a good overview of affected coverage lines, including possible claims scenarios and relevant legislation or court cases.
Business interruption is one of the hottest topics right now in insurance related to COVID-19. Because business interruption insurance covers lost profit and expenses from business operations being disrupted by “direct physical loss or damage” to insured property, losses due to COVID-19 are generally considered to be outside coverage. However, multiple states are now proposing legislature to require insurers to pay business interruption claims for COVID-19-related losses even when policies have explicit bacteria/virus exclusions. Many insurance organizations, such as Big I, PIA, and NAIC, are working with the government at the state and federal level to advocate for alternate solutions for business interruption losses caused by COVID-19.
Business Interruption Resources:
- Trump Tells Insurers to Pay Virus Claims if Pandemics Not Excluded (Insurance Journal)
- Coronavirus (COVID-19): Does Business Income Respond? (Big I)
- Coronavirus (COVID-19) Business Income Losses: Are They Covered? (IRMI)
- Coronavirus and Business Income Losses (OIA)
- Does Business Income Insurance Cover Coronavirus Shutdowns? (Insurance Journal)
- P/C Insurers Put a Price Tag on Uncovered Coronavirus Business Interruption Losses (Insurance Journal)
For Workers' Comp, whether COVID-19 is considered an occupational hazard seems to vary on a case by case basis. NCCI states: “While WC laws provide compensation for ‘occupational diseases’ that arise out of and in the course of employment, many state statutes exclude ‘ordinary diseases of life’ (e.g., the common cold or flu).”
In addition, most Workers' Comp coverage requires that the injury/illness arise out of and in the course of employment, which can be difficult to prove with COVID-19, except in sectors that clearly put employees at a higher risk of contracting the virus, such as the healthcare industry. For example, the state of Washington’s Department of Labor and Industries has changed its workers' compensation coverage for healthcare workers and first responders to “pay for medical testing, treatment expenses if a worker becomes ill or injured, and provide indemnity payments for those who cannot work if they are sick or quarantined” (NCCI).
Workers' Comp Resources:
- Coronavirus and Workers’ Compensation (BIG I)
- COVID-19 and Workers Compensation: What You Need to Know (NCCI)
- Coronavirus—Is It Compensable? (IRMI)
- The Real Impact of COVID-19 on Workers’ Compensation (PC360)
One of the most obvious coverages for COVID-19 is event cancellation. However, whether a cancellation policy will cover cancellation due to COVID-19 depends on the broadness of the policy. Many policies have an exclusion for communicable diseases, including the threat or fear of a pandemic. However, a broader policy that includes “all cause” event cancellation could cover cancellation due to COVID-19 concerns, depending on the specific policy wording, as well as factors such as date and location.
Event Cancellation Resources:
- Coronavirus: Event Cancellation and Contingency Nonappearance Insurance (Wilson Elser)
- COVID-19 Business Interruption and Event Cancellation (HFW)
There are many other policies and coverages that may be affected by COVID-19. Below we’ve linked to resources for a few other areas being impacted by COVID-19.
- Commercial General Liability (CGL)
- Travel Insurance
- Directors and Officers (D&O)
- Credit Insurance
- Commercial Property Vacancy
- Environmental Insurance
COVID-19 resource pages
Many organizations have entire resource pages devoted to COVID-19’s impact on insurance, which are regularly updated with the most current legislation, articles, webinars, and more. Here are some of the resource pages that HawkSoft has found most helpful in staying up to date on COVID-19 concerns in the insurance industry.
- Big I
- PIA National
- National Association of Insurance Commissioners (NAIC)
- Insurance Journal