The coronavirus (COVID-19) crisis continues to evolve as a global health concern but as the saying goes, “all news is local.” In this post, we’ve rounded up COVID-19 information, news stories, and resources on issues that might have an impact on your agency service and operations.
We’ve gathered news and resources in several buckets:
- Insurance-related issues
- Preparing your agency for potential disruptions
- Reputable sources of information
First, we point you to our recent blog post in our consumer blog: Coronavirus facts, myths, travel issues and more, which offers prevention and personal safety recommendations and reputable information resources. Some of these tips may be helpful to your staff and your clients.
Sizing up the potential insurance issues and impacts
Massive quarantines are occurring in cities and countries around the world. Travel industry impacts have been severe. Supply chains are suffering huge disruptions. Financial markets are reacting with unsettling drops. Here in the US, we are moving from an early phase of the illness to a rapid acceleration, according to health authorities. Earlier this month, there were just over 200 cases in the US; today, the numbers continue to grow. Health planners are telling us to prepare for continued disruptions to our daily life. There are likely to be a number of ways that this will affect insurance.
PropertyCasualty360: Assessing the personal impact of the coronavirus – Claims arising from COVID-19 are likely to affect just about every line of insurance, but it’s people who are paying the highest price.
“As the disease spreads, so too does the impact on businesses around the globe. During the Marsh webinar, Christopher Lang, global placement leader for the U.S. & Canada for Marsh, said that insurers can expect to see claims for workers’ compensation, property, business interruption, general liability, pollution, employment practices liability, and directors and officers liability. “
PropertyCasualty360: Is the coronavirus a covered insurance loss?
“James Koelzer, a partner in the Clyde & Co. Los Angeles office finds, “The coronavirus has already led to business closures, supply chain issues, suspension of travel for business and holiday, and challenges for the health industry. It is hard to fathom the range of claims that the insurance industry might see, but coverage for many lines of insurance is triggered by physical damage to property, which I think will be hard to find in these circumstances. Overall, my feeling is the implications are so widespread that any claims to the insurance industry will depend on the specific policy language of the specific insurance product.”
Insurance Journal: Insurance Unlikely to Cushion Coronavirus Losses – But There Are Exceptions
“While there is a significant risk of disruption, coronavirus-related claims will be low,” analysts at Moody’s Investors Service wrote in a note on Monday. “Business interruption claims will be limited as these policies commonly exclude outbreaks of infectious disease, and pay out only if physical damage occurs.”
“The cost to insurers from payouts on travel insurance is likely to be minimal. Many travel policies exclude losses caused by epidemics, so unless consumers took out additional disruption cover they won’t be able to claim for canceling travel plans, according to a statement on Allianz SE’s travel insurance website.”
“Significant deterioration in equity markets and widening credit spreads, along with even lower interest rates, will weigh on insurers’ profitability and capitalization,” analysts at Moody’s said in a report. “The expected economic slowdown will also have a negative impact on insurers’ business volumes.”
Insurance Journal: Insurance Coverage for Losses Stemming from the Coronavirus
While business interruption claims may, at first blush, seem the most likely to follow from the coronavirus outbreak, depending upon the claims that are asserted, insurance coverage may exist under commercial general liability, D&O, and E&O insurance coverage. Commercial general liability insurance coverage provides a defense to claims asserted by third parties for bodily injury or property damage. With some companies experiencing a drop in share price, shareholder suits and others may follow. Those claims may trigger coverage under D&O and E&O insurance policies. People who are being quarantined on cruise ships or by other private entities might have claims about how they are being treated.
Agency Checklists: Business Interruption Coverage and The Coronavirus Pandemic
Businesses will naturally ask agents if they have any insurance to help them cope… the most relevant coverage that insureds might believe applies is business interruption.
Insurance Journal: Lawsuits Against Businesses Over Coronavirus Have Begun. More to Come?
“Hospitals, restaurants, day care centers, nursing homes and hotels may face claims that they didn’t take adequate steps to protect people. Shareholders can sue if companies fail to act effectively in response to the epidemic. Businesses are scrambling to see if their insurance policies cover disruptions caused by the virus. Governments are reviewing their quarantine powers.”
Other noteworthy COVID-19-rlated insurance news:
- Coronavirus Leads Companies with Supply Chain Disruptions to Invoke ‘Force Majeure’
- Fitch Sees Only ‘Modest Impact’ on U.S. P/C Insurance from Coronavirus
- Coronavirus Raises Insurance Questions But Catastrophe-Tested Insurers Are Prepared
- Coronavirus Will Cost Businesses Billions. Insurance May Not Help.
Coronavirus emergency prep for your agency
We don’t yet know if widespread business closures, whether optional or due to quarantine, will be in effect. But as a case in point, within just a few weeks, Italy’s outbreak progressed from a handful of cases and some limited geographic containment measures to widespread government-imposed quarantine in an effort to slow the spread. Quarantines and closures will not eliminate the illness but are designed to slow the spread and flatten and elongate the growth curve so that hospitals and health care systems are not overwhelmed to a crisis point.
Here are some emergency prep steps you should be thinking about for your agency:
- Prepare your office for potential disruption up to and including quarantines, community containment measures, school, business, and public transportation closures.
- Plan for and ensure remote work systems and technologies are in place to enable telework. Plan for video and teleconference systems, if you don’t already have them.
- Ensure that your emergency communication systems with employees, clients, and insurers are in place
- Prepare your staff to be able to respond to coronavirus-related insurance questions, such as for business interruption, special events insurance, travel insurance, workers comp, and liability.
- Identify essential employees and functions. Plan for and train backups in case of absence.
- Be ready for employee absences during a pandemic due to factors like personal or family member illness.
- Identify employees and key customers with special needs and incorporate their requirements into the preparedness plan.
Business emergency prep resources
- US U.S. Centers for Disease Control and Prevention (CDC): Interim Guidance for Businesses and Employers – Plan, Prepare and Respond to Coronavirus Disease 2019
The CDC adds this important caution for employers: “To prevent stigma and discrimination in the workplace, use only the guidance described [in the guidance linked above] to determine risk of nCoV infection. Do not make determinations of risk based on race or country of origin, and be sure to maintain confidentiality of people with confirmed coronavirus infection.”
- Department of Labor: Guidance on Preparing Workplaces for COVID-19
- Ready.gov: Preparedness Planning for Your Business
- SHRM: Coronavirus Concerns in the Workplace
- HR Dive: COVID-19: Steps to prepare a remote work policy
- AmTrust: Coronavirus: Best Practices for a Work From Home Policy
- PropertyCasualty360: Pandemic checklist: How individuals and businesses can prepare
Coronavirus – reputable information resources
In any emergency, rumors and myths abound, particularly on social media. Rely on and share only reputable resources. Here are a few:
- NYT: Tracking Every Coronavirus Case in the U.S.
- NYT: Coronavirus Map: Tracking the Spread of the Outbreak
- The Centers for Disease Control & Prevention (CDC) has a dedicated coronavirus site with information for the public about how the illness spreads, symptoms, testing, FAQs, fact sheets and more.
- Coronavirus disease (COVID-19) outbreak, web resources from the World Health Organization (WHO), includes helpful, reputable information.
- Johns Hopkins Coronavirus Resource Center
- CDC: Frequently Asked Questions and Answers
- State & Territorial Health Department Websites