We have received a lot of questions regarding the insurance implications of the Coronavirus and more specifically how it relates to workers compensation and business income losses. Businesses should evaluate whether and how their operations and revenue may be affected by the Coronavirus and closely analyze existing insurance policies. In order to make sure our commercial clients are properly informed, we have put together some important facts you should know as it relates to your business.
Business Income Loss & Coronavirus
“Is there business income coverage if a governmental authority requires businesses to close?” According to Chris Boggs, Executive Director of the Independent Insurance Agents and Brokers of America, “No, there is no business income coverage.” Why? Well, before business income responds there must be damage to the property leading to the cessation of a business. This requirement applies to business income supply chain (property you are dependent on for supplies) losses and civil authority losses covered by business income policies. This is true of “standard” business income forms and while there may be proprietary forms that respond, these are very rare.
While the industry is coming up with new coverage forms that may provide coverage, no carrier that we are aware of has agreed to now provide the coverage for the current Coronavirus problem.
Workers Compensation & Coronavirus
The most common questions we are receiving are in regards to workers compensation are: “what makes an illness an occupational illness?” (and thus compensable under workers compensation) and “how does or might workers’ compensation respond to the Coronvirus?” According to Chris Boggs, Executive Director of the Independent Insurance Agents and Brokers of America, two tests must be satisfied before any illness or disease, including the Coronavirus, qualifies as 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.
“Whether the illness arises out of and in the course and scope of employment is a function of the employee’s activities”, said Boggs. To determine whether an injury arises out of and in the course and scope of employment, ask yourself: was the employee benefiting the employer when exposed to the illness or disease? Understand that this is subject to the interpretations and intricacies of various state laws.
If the illness or disease is not peculiar to the work, it is not occupational and thus not compensable under workers’ compensation. An illness or disease is peculiar” to the work when such a disease is found almost exclusively to workers in a certain field or there is an increased exposure to the illness or disease because of the employee’s working conditions. An 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.
Does the Coronavirus Create a Workers Compensation Exposure?
According to Boggs, the short answer is not likely. Other than the fact that the Coronavirus is currently garnering intense attention, in most cases, it is no more occupational than the flu. Only if it is proven that the employee has an increased risk of contracting the virus due to the peculiarity of his or her job, might the Coronavirus be considered occupational and thus compensable. As noted earlier, healthcare workers may be able to prove the necessary peculiarity being face-to-face with sick people ALL day to assert a compensable injury.
Our goal right now is to make sure our clients are properly armed with the facts on insurance coverage availability and applicability. At Gunn-Mowery, we are proactively staying ahead of the news and will keep you updated as insurance information relating to the Coronavirus becomes available. Please contact us with any questions!