COVID-19, better known as the Coronavirus, originated in Wuhan, China. Latest theories point to bats and snakes as the origination points of the virus. Bats with a strain of the virus were hunted and eaten by snakes. The snakes were hunted, gathered and sold for food in markets within the Wuhan province. The disease-laden snakes were eaten by humans transmitting the virus to humans; at least this is the theory. According to the Centers for Disease Control (CDC), the Coronavirus is thought to be transmitted person-to-person through “respiratory droplets produced when an infected person coughs or sneezes … these droplets can land in the mouths or noses of people … or possibly be inhaled into the lungs.”
So, how does the Coronavirus affect business insurance coverage? Below we go over two major coverages and how the Coronavirus applies to both.
Business Income Coverage
One of the most common questions insurance companies have been asked regarding the Coronavirus relates to business income insurance coverage, specifically: “Is there business income coverage if a governmental authority (civil authority) requires businesses to close?”
No, there is no business income coverage. This is the short answer. Before business income responds there must be damage to property leading to the cessation of a business. This requirement applies to business income dependent property losses (supply chain) and civil authority losses covered by business income policies. Additionally, there is a specific property exclusion applicable to viruses that may (generally will) apply. This is true of “standard” business income forms; there may be some proprietary forms that respond, but these are rare.
Workers’ Compensation
Two tests must be satisfied before any illness or disease, including the Coronavirus, qualifies as occupational and thus compensable under workers’ compensation:
- The illness or disease must be occupational,” meaning that it arose out of and was in the course and scope of the employment; and
- The illness or disease must arise out of or be caused by conditions peculiar” to the work.
The Coronavirus is not special. Coronavirus may be a humankind exposure rather than one peculiar to most employments. 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 something peculiar about the work that 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.
***For example, black lung disease in the coal mining industry is a disease that is peculiar to the work of a miner. 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 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.
For more details on workers compensation + coronavirus, click HERE.
We hope the information above answers some of your questions about the affects of the Coronavirus on business insurance coverage. Please feel free to contact our office with any additional questions you may have.
Be safe and wash your hands.
Source: Articles written by Big “I” (Independent Insurance Agents & Brokers of America).