A Covid-19 insurance primer for New Hampshire businesses
A look at how the coronavirus affects a range of policies
Here are some simple tips which will demystify what your insurance agent or insurer can explain:
The health insurance industry has moved quickly in collaboration with providers and regulators to make Covid-19 testing and treatment as seamless as systems allow, including these general guides :
- No deductibles or co-pays or other cost-sharing for Covid19 testing
- No deductible or co-pays for treatment of Covid-19 through certain dates. Generally, end of May
- No prior authorizations for testing/treatment required, in some cases through certain dates.
Health insurance premiums can be paid for out of proceeds from forgivable loans under the Payroll Protection Program. (You can call my colleague, attorney John Funk for further guidance, at 603-496-6735.)
General liability, business owner policies and directors & officers policies
Generally speaking, general liability covers obligations for bodily injury and property damage, so there could be third-party liability coverage if there are bodily injury claims resulting from exposure to Covid-19. Some packages (general liability and property) provide some business interruption insurance coverage. There are both commercial multi-peril property policies and business owner policies that provide coverage for business interruption.
There may also be endorsements that extend the coverage on an existing policy (and there are separate policies that provide business interruption insurance coverage as well).
If your business and you are sued, there may be coverage under your general liability or other policy. However, some policies may have exclusions for losses resulting from epidemics or pandemics. In short, you need to carefully review and study your policies.
Directors & officers policies cover claims arising out of the discharge of their respective duties or failure to carry out such duties. Hopefully, you have already taken all reasonable and prudent steps with respect to responding to the risks associated with Covid-19. If not, you should immediately do so by following the guidance of the Centers for Disease Control and the state’s public health agencies.
Business interruption insurance/civil authority
Business interruption insurance is not as simple as many small business owners suspect. The policies generally provide coverage for circumstances within the meaning of the policy language that cause an interruption in business. Usually, they require damage to the business location or property, and there may be exclusions for viral infections like Covid-19.
However, there is much discussion among legislators and activity among trial lawyers to force insurers to pay claims irrespective of exclusions and whether the policy would actually pay the claim. This is the case without regard to the fact that there was no underwriting or premium collected for the risk. Organized and professional efforts to achieve this result are mobilizing throughout the country, ensuring costly litigation for years to come.
You can learn more details about business interruption insurance in its various forms from the New Hampshire Insurance Department’s FAQs.
There is also likely some coverage for “civil authority” in your policies. The government shuttered businesses that weren’t declared “essential.” The issue to overcome will be the requirement of actual physical loss.
As a long-term officer of a workers’ compensation insurer, I am going to simply provide you with the National Association of Insurance Commissioners’ guidance:
Workers’ compensation insurance covers work-related injury or illness – either sustained on business premises or due to business operations. Typically, workers’ compensation covers the employee’s medical expenses, rehabilitation costs and at least some portion of their lost wages. Workers’ compensation policies typically cover only occupational diseases, which are diseases that are unique or peculiar to one’s job. Ordinary diseases of life are not covered. Covid-19 may be covered in certain limited circumstances, depending on how the individual contracted it, their occupation and the specific policy.
God willing, you won’t have the need to consult your life insurance policies. Obviously, group and individual coverage can be impacted based on the position of the deceased.
In closing, as the New Hampshire Insurance Department says: Insurance is complex. Your policies need to be carefully reviewed with a trusted advisor. While many policies seem the same, the differences will determine whether or not your business is covered.
Attorney Donald J. Pfundstein is a shareholder and director of the Concord-based firm of Gallagher, Callahan & Gartrell. His practice focuses on regulated industries.