As COVID-19 continues to affect the world, the speed of developments is shocking and is having an unprecedented impact for businesses, economies and families. When businesses are forced to be closed, they are still racking up costs every single day. These daily disruptions are starting to mount and have a ripple effect on business activity, forcing the hand of so many to change course.
The COVID-19 pandemic isn’t going to end in just a couple of weeks or a month. Many reports suggest that it may well be into the second half of this year, and many businesses are seeking guidance as to whether their existing insurance coverage can respond to this volatility.
Can your coverage respond to this volatility?
Many businesses are accepting this new reality that they might experience a claim or a loss of some kind. While we are still riding through the first wave of what this new business landscape will look like, it is important to get out ahead of whether certain policies will respond to these losses, and what the financial repercussions of a claim may be.
Commercial property policies are complex and not standardized, and generally speaking, many commercial insurance policies wouldn’t have coverage for a pandemic. They are tailormade to your business, which is why it is vital to talk to your broker immediately to limit your exposure.
Our top priority is to make sure you are taken care of. We are here to support you so you can get out in front of evaluating your insurance claims and execute your due diligence when dealing with this disruption.
Understanding Vacancy Restrictions through Commercial Property Policies
If your location is vacant, unoccupied or shut down beyond a specified period of time – whether it is government mandated or a business decision to cease operations — please inform us right away so we can notify the insurance company of this change.
The specific language of each policy will be key when evaluating Business Interruption Coverage and how it will be interpreted. Each situation is unique and all circumstances must factor into defining a building’s occupancy status.
Has There Been any Changes in Your Operations?
Did you know that if you make changes to your operations or change the occupancy of your building, you can be denied for a claim made under that policy? It’s true, and it happens a lot.
More so now when businesses are pivoting in order to supplement their cash flow by either manufacturing, distributing, or selling new products to augment their balance sheet. Insurance policies will explicitly have language as a clause where you can be denied a claim if you change your operations.
Breaking Down the Three Different Policy Types
It is important to understand the type of policy in which you are covered, as this has a direct impact when reporting claims. Regardless of the policy type, it is highly recommended to immediately report claims to reduce the potential for denied claims.
Occurrence policy
Liability policies fall into one of two categories: occurrence or claims-made. Occurrence claims are anything resulting from an injury or another event that occurs during the policy term.
Claims-made and reported policies
Claims-made refers to an insurance policy that provides coverage when a claim is made against it, regardless of when the claim event occurred. They are claims against a policy months after the claims’ event takes place. A claims-made policy is a popular option for when there is a delay between when events occur and when claimants file claims, including; wrongful termination, sexual harassment, and discrimination claims.
Excess Insurer Reporting/Umbrella
It is important to know when the excess or umbrella insurers should be notified. This type of layered coverage is good to manage large risk for lower cost, but there might be disputes between insurers, so you want to make sure they are appropriately notified.
Brokers know the unique exposures of small business owners
If your property is unoccupied during the crisis, you have changed your businesses operation, or you are deliberating whether initiating an insurance claim may be a viable option for you, please contact us immediately as this may affect your insurance coverage.
Please feel free to contact us at 416-754-3910. You can contact your Account Executive at the office at 1 (800)-773-8638.
