Business owners have suffered significant losses because of COVID-19 virus, and there is no end in sight. With the US government and state governors issuing lockdowns and stay-at-home orders, most non-essential businesses have been closed temporarily.
Businesses and establishments moving forward as they’re allowed to start to reopen might not have enough coverage to protect them from coronavirus-related lawsuits.
Learning how to maximize their coverage against losses sustained in a crisis like the recent coronavirus pandemic helps businesses discover how to protect themselves more proactively.
How Does Business Interruption Coverage Work?
Business interruption coverage provides funding for covering expenses when the company cannot operate and generate profits. The insurance is useful for business owners who must pay overhead costs and provide wages for workers when the business must be closed.
It applies to circumstances where the property was destroyed, and the owner must rebuild or relocate to a new location to reopen their business. Adding a contingent business interruption rider to the policy helps when the crisis causes an immediate shutdown because the company must stop production.
It applies to circumstances where the company’s main supplier goes out of business and the business cannot generate profits. When reviewing Business Insurance Coverage, it is vital for business owners to find ways to cover all their bases and prevent financial losses.
How Does Key Worker Coverage Work?
The loss of key workers could lead to a financial loss for the business owner, too. If the key worker is vital to the operations of the business, key worker coverage may provide funding until the business can replace the key worker or until the individual is healthy enough to return to work.
In the coronavirus crisis, there is a higher probability of a fatality and the permanent loss of a key employee. If the key worker is responsible for debts, the coverage helps the business pay these debts and avoid a lawsuit through collections or a civil lawsuit filed by a creditor.
How Does Crisis Management Coverage Work for the Pandemic?
Crisis management coverage applies to a loss in confidence in the company due to uncontrollable circumstances. For instance, someone who is infected with COVID-19 and sneezes or coughs on a salad bar in a restaurant, the restaurant owner must close down the salad bar promptly.
If anyone contracted the virus while in the restaurant, media reports will crucify the restaurant for failing to keep patrons safe and damage the company’s reputation. In turn, when the restaurant reopens, patrons are less likely to patronize the business, believing that it isn’t safe, and the company takes a financial hit from the sudden loss of customers.
How Does Civil Authority Coverage Help You?
Civil authority coverage is a policy that provides replacement funds when the business is interrupted by a state or federal authority, such as the governor or the president. This applies to the current coronavirus crisis in which non-essential businesses have been shut down throughout the country to lower the spread of the virus.
The policies could keep businesses afloat until the government allows the companies to reopen and start generating more profits. However, there are limitations to how much the company can access, and it is vital for the owner to review the restrictions when starting the policies and increase funds when possible.
General and Global Liability Coverage
General and global liability coverage protect the company against liabilities related to their property, products, or the services the company provides to the public. For example, the coverage provides financial assistance if a customer files a lawsuit for a slip and fall accident that occurred on the business property. In the current pandemic, a customer could sue if they contract the virus because of unsanitary conditions or the workers are infected.
Any business that fails to take proper precautions to protect their customers could face liabilities and serious financial losses, especially if the customer dies. The insurance provides financial assistance to reduce the impact of the lawsuit award.
Worker’s Compensation Coverage
Worker’s compensation coverage helps the company mitigate the risk of a lawsuit if a worker becomes injured or sick at work due to workplace conditions. In light of the coronavirus crisis, there is a higher probability of occupational disease if the workplace isn’t sanitized more frequently.
Exposure to the virus will increase under unsanitary conditions. More workers will file for worker’s compensation benefits for medical coverage and replacement wages. Without the coverage, the business owner is at risk of facing financial losses if the workers are denied these benefits.
Product Liability Coverage
Product liability coverage helps companies that are facing lawsuits when a consumer becomes injured by a product manufactured by the company. In terms of the coronavirus, the consumer would have a claim if the product was marketed as a treatment for the virus or if the consumer contracted the virus from the product.
For example, meatpackers who are testing positive for the virus could present a risk to consumers if the infected workers handle the meat products. Under the circumstances, the manufacturer is liable if they allowed sick workers to handle the meat products and contaminate the food with the virus.
Professional Liability Insurance
Professional liability insurance covers professionals who offer specific services to the public. For example, a doctor who gave advice about a specific treatment for the coronavirus might be liable if a patient used the treatment and became worse because of the treatment.
Doctors could be liable if the patient contracted the virus from the doctor, their medical staff, or the medical center while being treated for something unrelated to the virus.
The Bottom Line
Business owners must review insurance coverage and buy policies to protect themselves against COVID-19 losses and other similar situations. As more cases emerge, the liabilities could stack up against business owners and generate heavy losses that could shut down the companies forever. New laws and the emergence of coronavirus-related illnesses and injuries could bankrupt some businesses.
Understanding the new laws and insurance coverage options could protect the companies more fully and prevent a major catastrophe for businesses in the future.