B U S I N E S S
Business Insurance Policies
What your company needs to know to navigate the coronavirus era
By Travis McElvany, HUB International
It’s common knowledge that COVID-19 has dramatically
changed the face of business. However, what’s less commonly
known is that business insurance is struggling to
keep up. With so much uncertainty, business owners and
operators need to be prepared when positioning their business
ahead of this year’s renewal.
As businesses continue to feel the effects of COVID-19
on their operations and revenue, many are looking to their
property and casualty coverages for relief. While some claims
have been denied outright, many more are still under review.
Some may even head toward litigation. What’s more, the
market is hardening and increases across the board should be
expected. Here’s how to prepare best.
Business interruption insurance
Unprecedented business closures have led to a growing
number of business interruption claims under the business
income/extra expense (BI/EE) coverages contained within
a commercial property policy. BI/EE coverages include shutdowns
imposed by a civil authority, but these coverages are
designed to cover direct physical loss or damage to property,
often caused by fire, lightning, wind, hail or theft, and
are not intended to respond to a virus or pandemic which
fail to meet the definition of direct physical loss. For this
reason, claims that aren’t denied immediately are likely to
play out in various forms of litigation. Insurance carriers are
also keeping a close eye on provincial legislation that could
require carriers to pay for BI/EE claims, regardless of the
policy language.
This means carriers who include BI/EE as part of their
offering will likely place additional scrutiny on requested
limits and may revise their renewal offerings. For example,
some American businesses that currently hold BI/EE policies
with expiring limits of US$20 million may be offered as little
as US$5 million in coverage at renewal – and Canadian businesses
may be in a similar situation. In addition, if they didn’t
already, renewal policies will likely carry a virus/pandemic
exclusion to further clarify their coverage position.
ammentorp/123RF
As employers prepare to recall employees back to the office or continue having workers
operate from home, there are a number of insurance considerations that must be made ALBERTA HEAVY Quarter 1 2021 33
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