In these unprecedented times, the R.K. Tongue Co., Inc. (RKT) team takes its risk management and insurance advisory role seriously.  As your VDA Services-endorsed insurance intermediary, we put together the following FAQ response and general assessment of the U.S. Domestic insurance landscape as it applies to viral outbreaks and pandemics:

Will business interruption insurance pay for my lost collections due to office closure?

Most likely, no.  Commercial business interruption insurance generally requires direct physical damage to a covered property as a coverage trigger.  When in doubt, file a claim since only your insurance carrier can make a final determination.

Does the declaration of a national or state emergency change my business interruption insurance?

In this case, no. Business interruption insurance typically includes a “civil authority” provision that extends business interruption coverage when access to an insured office is specifically prohibited by the government or similar authority, but this provision still requires direct physical damage to property in the immediate vicinity of an insured office.

Does workers compensation provide benefits if an employee contracts the coronavirus?

Employees who contract the novel coronavirus virus due to a work-related exposure can experience a covered workers comp/employer’s liability claim.  Your insurer will evaluate each claim on its own specific circumstances. 

Does health insurance cover business-owners or employees who become sick or need testing?

Medical needs associated with contracting the coronavirus are generally a covered health insurance claim.

Will individual or group long-term disability income insurance provide benefits if I become ill?

Yes, if you remain ill long enough. The effects of the novel coronavirus and related COVID-19 disease can be a covered long-term disability income claim provided the sickness duration meets your waiting period.  The most common waiting period for individual disability income benefits is 90-days.

Will overhead expense disability insurance provide benefits if I become ill?

Yes, if you meet the waiting/elimination period.  The most common business overhead expense disability waiting period is 30-days.

Will group short-term disability insurance provide benefits if I become ill?

Most likely, yes. Most short-term disability plans have relatively short waiting periods for benefits eligibility, e.g. 7-days for sickness and 0-days for injuries.

I heard that “pandemic insurance is available” can I get it?

Probably not.  Specific “pandemic insurance” for business interruption is generally rare.  RKT has recently become aware of a London-based specialty market that may offer insurance protection for future pandemics, but this insurance cannot be purchased during an ongoing viral outbreak/pandemic.  RKT was also recently made aware of a Canadian insurer that offers an optional business interruption insurance rider for pandemics as part of its business insurance policy.  Although we do not know many specifics about this product or its limitations and exclusions, we know that it is not available in the U.S.

When in doubt, file a claim.  The foregoing Q&A is for general informational purposes.  Only your insurance company can make a coverage determination based on your specific claim circumstances

We understand and share your concerns, fears, and business challenges.  We will provide updates to you, our valued clients, as circumstances dictate.  Please take all relevant precautions to stay safe and healthy.