DIG Insurance & Business Magazine Fall 2020 - Page 8


The Perils Of 2020

Anything Can Happen : The Importance Of Planning For The Unexpected

Fire . Wind . Theft . These are common perils we consider when creating a risk management plan . Because these occurrences happen every day . But who would have expected 2020 to introduce a global healthcare pandemic and economic shock , followed by serious civil unrest ?

These aren ’ t new happenings , just rare ones that don ’ t usually enter the conversation . But all occurred in 2020 and taught a few lessons . Many businesses were forced to shut down and were surprised to learn that business income coverage only kicks in if there is physical damage to the building . Retail , restaurants , and other highly patronized establishments are now considering the effects of communicable disease in their risk mitigation strategies .
Meanwhile , social inflation is impacting premiums of some insurance , including Directors & Officers and Employment Practices Liability coverage . Social inflation refers to the rising cost of claims attributed to societal moods and the trends toward increased litigation , more class actions , and a broader definition of liability . These attitude shifts create greater sensitivity , lead to more scrutiny , and are triggering highprofile lawsuits with large jury awards when there is perceived social injustice . Businesses could face claims related to negligent business decisions , harassment , defamation , and discrimination of a protected class .
There were a few silver linings . When riots and looting broke out across the country , businesses that suffered losses were encouraged to know they were protected by their property coverage . Those that had to temporarily shut down due to COVID-19 were able to adjust their insurance costs , extend payment terms , and some even received premium credits .
The industry is mobilizing to find alternative business income coverage in the absence of property damage .
One thing we all learned in 2020 was to expect the unexpected . A robust contingency plan isn ’ t a luxury – it ’ s critical . By planning for the future , we can move forward with the tools and protections to pivot and make decisions quickly . Most importantly , businesses should press the pause button and take stock of what risk management tools are in place today . Search for gaps and find the protection that can transfer the risk .
So , what does this mean from a business insurance perspective ? Here are a few questions to ask yourself to ensure you get the coverage your business needs to survive and thrive :
Restaurants and bars shifted to take-out and delivery , and they evolved to feature outdoor seating . Businesses across the board adopted sanitization protocols to keep employees and customers safe . Some businesses completely altered their operating models . How did your business adapt during COVID-19 ? Exposures evolve as businesses change . Now is a crucial time to re-evaluate potential risks and address previous exposures that might impact your business in today ’ s world .
No business wants to furlough employees , close doors temporarily , or reduce volume . But when these operational circumstances occur , there are insurance considerations to address . Talk to your Client Advisor about your existing workers ’ compensation plan and the business insurance you ’ re carrying today . Adjustments based on your post-pandemic business model could reduce your insurance expenses .
As your policy nears renewal time , consult with an advisor to discuss existing coverage and exclusions . Is there a product that could help you if a pandemic happened in the future ? Insurance industry professionals are evaluating how to provide affordable coverages for crises including pandemics and communicable disease risk . Consider what happened post-9 / 11 when insurers partnered with the federal government to design plans that cover acts of terrorism . Stay in touch with your insurance advisor so you can learn about the latest tools and products .
Pandemics happen . Civil unrest rattles communities . Communicable disease risk is not just a possibility ; it ’ s on the news every day . However , there are ways to thoughtfully plan for today and the future . Business insurance also evolves with the times . Let ’ s create a plan to protect your business so you can be nimble , confident , and ready for whatever the next days , weeks , and months bring . +
Michele Hoffman joined Deeley Insurance Group in 2017 as the Commercial Lines Manager . She has over 30 years of insurance experience , with 20 + of those years specializing in commercial insurance . Michele is a lay counselor at Oak Ridge Baptist Church in Salisbury where she has spent over five years volunteering . She resides in Berlin with her son and enjoys reading , beach combing , attending football games and spending time with family and friends . 410-213-5548 mhoffman @ deeleyinsurance . com