How Can Insurance Help with the Coronavirus?

There are some—but not many—ways that certain insurance policies can help individuals and businesses recover some of their financial losses related to COVID-19. Remember, any of these policies would have to be in force before this outbreak in order to have any coverage that they might offer. 

How Can Insurance Protect Me or My Family from the COVID-19 Crisis?

Some insurance policies may help you or your family during this time, and if taken out in advance would be relevant protection. For most insurance policies disease / illness outbreaks are not an exclusion to the policy. 

Communicable Disease Insurance and COVID-19

If you haven't already purchased communicable disease insurance, you won't be covered for the coronavirus. That insurance would have had to have been purchased before the coronavirus was identified, which happened in December. Communicable disease insurance is about the risk of the unknown.

For those considering purchasing communicable disease insurance for the future, the cost varies depending on how far in advance the insurance is purchased. 

Will My Travel Insurance Help Me?

Travel insurance offers financial reimbursement if you have to cancel a trip or cut a trip short. No two policies are the same, and your coverage depends on the type of travel insurance that you’ve purchased. In this case, your travel insurance would have to have been purchased before your trip to apply to the current pandemic situation. 

If you have purchased travel insurance, here are some ways that it may help you:

• Trip cancellation coverage: It's like it sounds, it will provide coverage if you need to cancel your travel because of a change of mind, business conflicts, delay in visa or passport processing, weather issues, and illness or disease such as the coronavirus. 
• Travel medical coverage: This coverage will come in very handy when dealing with other countries, states, and cultures where contracting an unknown illness or disease may be more prevalent. This coverage will allow you to see medical professionals, seek medical assistance, and be hospitalized while in another country, state or foreign land. This coverage is for short-term medical coverage, usually not exceeding a year.
• Major medical coverage: This is for longer-term travel where you may need to seek medical care while away. Typically, this will be for expeditions of a year or more.
• Emergency medical evacuation coverage: This coverage is for the medically required evacuation of an area. If you are in a remote region with little access to medical facilities, or you need medical transportation, this coverage is good to have.
• Accidental death/flight accident coverage: This coverage is similar to life insurance. It will pay out to the surviving beneficiaries or family of the traveler if they die as a result of travel or are critically injured.

Will My Life Insurance Policy Help Me?

Unfortunately some Americans may lose their lives as a result of COVID-19. These unexpected deaths will cause emotional and financial hardships for many families. 

Many people fortunately have a life insurance policy in place already, offering peace of mind in uncertain times. Most life insurance policies pay for deaths of any kind (deaths by suicide may not be covered during the first two years or a specified waiting period), including deaths from viruses or a pandemic. Some policies may exclude coverage for deaths caused by certain conditions that were present at the time of application, at least for a specified period of time. 

In most cases of COVID-19 infection, life insurance would pay the death benefit to a policyholder’s beneficiaries for those whose lives are lost during this outbreak. 

If you don't already have life insurance, it may be more difficult to purchase a policy now, as underwriting guidelines are evolving to respond to the crisis. Some insurance companies have stopped issuing new policies. Others may ask you additional questions about recent travel, and additional waiting periods may be imposed, particularly if you’ve traveled to a high-risk country or area of the US. Your independent insurance agent will be able to give you sound advice and options to help ease your mind in the midst of chaos.

Will an Accidental Death and Dismemberment Policy Help Me?

Some people have accidental death and dismemberment (AD&D) policies, often through their employers. These policies offer only limited coverage for certain types of accidental deaths or disabilities (plane crashes, accidental falls, etc.). Since a disability or death from COVID-19 would not be “accidental” in nature, an in-force AD&D policy would not pay benefits. 

How Can Insurance Protect My Business from the COVID-19 Crisis?

Businesses of all kinds are wondering if they’ll have any insurance coverage to mitigate the huge losses they will face due to shutdowns, cancellations, or limited operations due to the coronavirus outbreak. The answer is that in most cases, your insurance coverage for this situation is quite limited. 

Will I Be Able To Use Event Cancellation Insurance?

Event cancellation insurance covers a number of situations that may result in the cancellation of an event. It will cover the loss of revenue and extra expense that comes with canceling an event. 

Currently, major events all over the United States are being canceled due to the coronavirus, but what about the lost revenue, vendor expenses, and the like? That is what event cancellation insurance is for, and it covers things like:

• Power failure
• Damage to leased venues
• Damage to surrounding venues
• Natural catastrophes
• Adverse weather
• No-shows by speakers
• Terrorism
• Disease or illness outbreaks

Unless excluded in the policy, an event cancellation policy may cover you from a disease outbreak, depending on how far in advance the policy was purchased. 

Review Your Cyber Liability Insurance Policy

With more employees working from home, your cyber risk has literally been pushed outside your corporate walls and into the homes of your employees. Cyber liability insurance can help you deal with business interruptions, lost revenue, and lawsuits and all of their related costs if your business experiences a cyber attack like phishing, a data breach, or some other type of hacking incident.  

If you think your cyber risk has changed in the last few weeks, it may be a good idea to discuss this policy with your independent agent to make sure you would be covered in the event of a loss.

Will My Workers’ Compensation Insurance Help Me?

The purpose of workers’ compensation insurance is to protect employees when they have a work-related injury or illness. So if an employee contracts COVID-19 as a result of their job or in the course and scope of their work, then their expenses and lost income would be covered by your workers’ compensation insurance. 

But keep in mind that it’s likely that the insurance carrier will investigate any workers’ compensation claim for a COVID-19 infection, and proof that the infection was work-related would have to be provided. This may be easier in the case of a healthcare worker than for someone who works in an office where the source of the infection could be hard to trace or prove. Employees will be required to provide documentation of business and personal travel and potential contacts with the virus so it can be proven that the exposure is work-related. 

Testing for the Coronavirus and Workers' Compensation

Two tests must be satisfied before any illness or disease, including the coronavirus, qualifies as occupational and thus compensable under workers' compensation: 

1. "The illness or disease must be occupational," meaning that it arose out of and was in the course and scope of the employment. 
2. "The illness or disease must arise out of or be caused by conditions peculiar" to the work.

Whether an illness arises out of and in the course and scope of employment is a function of the employee's activities. The simplest test to determine whether an injury arises out of and in the course and scope of employment is to ask: Was the employee benefiting the employer when exposed to the illness or disease?  This test is subject to the interpretations and intricacies of various state laws. 

Qualifying as occupational is a relatively low hurdle. A higher hurdle is whether the illness or disease is peculiar to the work. If the illness or disease is not peculiar to the work, it is not occupational and thus not compensable under workers' compensation. An illness or disease is peculiar to the work when such a disease is found almost exclusively in workers in a certain field or there is increased exposure to the illness or disease because of the employee's working conditions. 

For example, black lung disease in the coal mining industry is a disease that is peculiar to the work of miners. Coal miners are subject to prolonged exposure to higher-than-normal concentrations of coal dust, leading to black lung disease. This makes the disease peculiar to the coal mining industry. 

Another example of an exposure that is peculiar to the work is a healthcare worker contracting an infectious disease such as HIV or hepatitis as a result of contact with infected blood. The worker's unusual or peculiar exposure to such diseases results in an illness that is occupational and compensable. 

No one test is available to determine whether an illness or disease is compensable or non-compensable; each case is judged on its own merits and surrounding circumstances.

Concluding that an illness is occupational, peculiar to the work, and ultimately compensable is not necessarily based on the disease in question, but rather on the facts surrounding the worker's illness. Factors investigated and considered by medical professionals and the courts include:

• The timing of the symptoms in relation to work: Do symptoms worsen at work and improve following prolonged absence from work (in the evening and on weekends)?
• Whether coworkers show or have experienced similar symptoms 
• The commonality of such illness to workers in that particular industry
• An employee's predisposition to the illness (an allergy or other medical issue)
• The worker's personal habits and medical history. Patients in poor medical condition (overweight, smokers, unrelated heart disease, etc.) and/or with poor family medical histories may be more likely to contract a disease or illness than others in similar circumstances. Bad habits and poor medical history (and heredity) cloud the relationship between the occupation and the illness. For example, smokers may be ill-equipped to fight off the effects of illnesses to which others may have no problem being exposed.

How Does the Coronavirus Affect Workers' Compensation? 

If it is proven that the employee has an increased risk of contracting the virus due to the peculiarity of their job, the coronavirus will be considered occupational and thus compensable. Remember, compensability as an occupational illness requires that there is something about the job that increases the risk of exposure and illness. 

Since they are face-to-face with sick people all day, healthcare workers may be able to prove the necessary peculiarity to assert a compensable injury. 

Which Policy Responds to Qualifying Occupational Illnesses and Diseases?

While the coronavirus has a relatively short gestation period, other occupational illnesses and diseases often have long gestation periods. Employees may be exposed to the harmful condition for many years before the illness manifests. It is also possible that the employee won't contract the disease until years after the exposure ends. 

Workers' compensation policies specifically state that the policy in effect at the time of the employee's last exposure responds to the illness, even if the employee is working for another employer, or is even retired, at the time the disease manifests.

The coronavirus may result from human exposure rather than exposure peculiar to most occupations. Contracting the virus at work is not enough to trigger the assertion that it is a compensable occupational illness. To be occupational and compensable requires that something peculiar to the work increases the likelihood of getting sick. It is unlikely that both the occupational and peculiar thresholds can be satisfied to make most illnesses compensable for the vast majority of individuals; the same is true of the new coronavirus. 

Business Interruption Coverage Will Not Be Applicable

Business interruption coverage is also referred to as business income coverage or loss of use coverage. It is part of your commercial property coverage, and helps your business recover lost income and continue to pay expenses when there has been physical damage to the commercial property caused by a covered peril, like fire or weather. That means if your business is damaged or destroyed by a fire or a severe weather event, your business interruption coverage will help keep you afloat while you make repairs or rebuild and restock. 

In the case of COVID-19, businesses are closing and losing revenue out of necessity (health and safety of employees, significant drop-off in demand, government guidance, or in some areas government mandate). Because the closures and lost revenue do NOT involve physical damage to your property, there will not be coverage under your business interruption policy. 

In fact, many business interruption and property insurance policies are silent in their policy language regarding viruses, bacteria, and pandemics because these types of perils or events are not likely to lead to physical losses of property. While your policy may not specifically exclude coverage for a pandemic, it won’t be listed as a covered peril either. That’s because diseases and pandemics don’t cause physical property damage, so business interruption coverage simply isn’t applicable. 

What about Business Income Insurance, Will That Help Me?

Some businesses, like restaurants, hotels, and other food service businesses, may wonder if they have some business income coverage if the pandemic interruptions lead to food spoilage and food loss. Here too, the answer is probably no. In order to be covered under a food contamination and spoilage endorsement, the business would need to experience a utility loss that leads to the food spoilage before the policy would respond. 

Double-Check with Your Agent If You Canceled an Event

There are a few areas, however, where certain businesses may be able to have some coverage for losses resulting from a pandemic. If you’ve had to cancel an event because of the pandemic and you have event cancellation insurance, you’ll be able to recoup some of your losses. 

What Should My Business Do If I’m Planning to Make a Claim?

The most important thing you can do now is to understand that all policies are different. Read your insurance policies, call your insurance agent, and document how and why the virus is affecting your life or your business if you plan to pursue some type of insurance coverage for your losses.

Work with an Independent Insurance Agent for the Best Coverage

Independent insurance agents have access to multiple insurance companies, ultimately finding you the best coverage, accessibility, and competitive pricing while working for you. And as the coronavirus pandemic evolves, they'll be there to help you adjust your coverage, up or down, to make sure you're properly protected without overpaying. 

And most importantly, they can help you navigate the coverage that you have today, so you’ll know where your insurance coverage might be able to help you through this difficult time.