Risk & Business Magazine Spectrum Insurance Spring 2020 | Page 6

COVID-19 IMPACT "THIS TYPE OF COVERAGE IS INCREASINGLY IMPORTANT AS COVID-19 CONTINUES TO AFFECT THE GLOBAL ECONOMY. EVEN IF A BUSINESS IS NOT LOCATED IN AN AREA WHERE COVID-19 HAS BEEN DETECTED, ASPECTS OF THEIR SUPPLY CHAIN MIGHT BE, LEADING TO POTENTIAL DISRUPTIONS." was contracted due to the insured’s negligence and detail how, when, and where they got sick—all of which could be difficult to pin down. • Directors and officers (D&O) insurance—Shareholders and other stakeholders could sue a business should they fail to respond appropriately to COVID-19 concerns. Specifically, stakeholders may contend that management failed to develop adequate contingency plans or detail how COVID-19 could impact the company’s financial performance. It should be noted that most D&O policies exclude coverage for bodily injuries, but they may offer some protection depending on the specific allegations. As such, it’s important for businesses to review the scope of their D&O policies to confirm they are covered in the event of an incident. WORKERS’ COMPENSATION INSURANCE In instances where an employee believes they contracted COVID-19 at work, a number of workers’ compensation considerations come into play. Notably, when it comes to workplace illnesses, most state statues only pay out benefits if the disease in question is occupational in nature. That is to say that communicable and contagious diseases are generally excluded from workers’ compensation policies. 6 However, coverage may be triggered if the illness arose due to or in the course of the worker’s employment. In general, these scenarios are examined on a case-by-case basis, but could include instances when: • a health care worker contracts COVID-19 at the hospital at which they work; • an airline employee contracts COVID-19 from a passenger; or • a hospitality worker contracts COVID-19, which is later linked to a large event at which they worked. PREPARING FOR A CLAIM While COVID-19 introduces a level of uncertainty when it comes to available insurance protection, there are a number of precautions organizations can take to prepare for a claim. To control potential losses, policyholders should: • audit existing insurance policies and their provisions to identify potential gaps in coverage; • review and modify existing contingency plans, estimating the potential impact of a long- term closure; • identify equipment, services, and third parties critical for continued operations; and • have a process in place for responding to a loss, which could include: • detailing how the loss occurred and the impact the loss had on your operations; • tracking all losses and expenses associated with the claim; and • highlighting how the claim could impact third parties, like suppliers and consumers. For additional protection, it’s important for businesses to seek the help of a qualified insurance professional. These professionals can help you review your insurance programs and recommend potential solutions to address your exposures. For more information, contact Spectrum Insurance Group today. + CONTACT US: [phone] SPECTRUMINSGROUP.COM [email protected]