Insurance 2021: COVID and What to Expect

INSURANCE 2021: COVID AND WHAT

TO EXPECT BY DEBBIE WILLIAMS RISK MANAGEMENT SERVICES

Adapting to the current environment surrounding COVID is challenging enough for all of us, but for a small business trying to get back on its feet the process can be overwhelming. When it comes to insurance in 2021, we would like to offer a few quick insights to help you navigate through the commercial market, renewals of your policies, and some additional information we have learned in the past few months.

SBA LOANS

Many of you looked to the Small Business Administration for loans to keep your business afloat during the pandemic. You either took advantage of the Paycheck Protection Program (PPP) or the COVID -19 Economic Disaster Injury Loan (EIDL). Both programs offered opportunities to borrow the capital needed to pay necessary expenses such as payroll, health benefits, rent, etc. The program that we seem to receive the most questions about is EIDL. EIDL is a very low interest rate loan that the SBA developed for businesses involved in natural disasters, and was adapted to meet the needs of small businesses during COVID-19. EIDL has some unique features that make this loan attractive.

• No payments during year one. • No collateral required for loans less than $25,000 • Collateral requirement for loans over $25,000 • General Security Agreement for collateral that includes the use of business personal property as your collateral The SBA requires that those loans over $25,000 utilizing business personal property as collateral must have Hazard Insurance to cover the collateral to at a minimum 80% of the insurable value. For those of you that are in need of a policy to cover your business personal property, Risk Management Services can help you obtain that coverage.

COVID CLAIMS

Over the past year there has been many attempts made by insureds to file claims against insurance companies claiming lost revenue. Many have filed those claims under their Property policy or Business Income. In a more detailed discussion, we could go into the specifics as to why a traditional property policy containing business income coverage would not cover loss of income due to COVID-19. The bottom line is it doesn’t. The key words in the policy are (paraphrased) “must be caused by direct physical loss of or damage to property”. That being said, many of the insured’s attorneys are still trying to assert their interpretation of the wording in the courtroom. In some very limited situations, juries have sided with the insured on policy interpretation.

COVID EFFECTS ON INSURANCE

As a result of the pandemic and the aforementioned claims litigation, the insurance industry has added a mandatory exclusion to their policies excluding communicable diseases entirely.

To date, the insurance industry has not mandated any COVID specific guidelines or requirements for the purchase of insurance. The only suggestion is that you adhere to and follow all local and state guidelines regarding COVID safety protocols. We have had several questions regarding the use COVID waivers in addition to those already utilized for parents and participants. So far there is no requirement from the insurance industry to utilize COVID waivers, however Risk Management Services strongly suggests that you consult your business attorney and follow their direction regarding the use of waivers and whether additional wording for COVID is appropriate.

FACILITY CONTRACTS

Risk Management Services recommends that you review any contracts for facilities that you may be renewing or starting with a new location. We have seen several contracts already where the contract includes wording asserting all responsibility for COVID claims and or allegations to the lessee. We would recommend that you don’t sign this type of agreement and only agree to follow local and state COVID protocols and guidelines. As always consult your attorney when reviewing contracts.

VACCINES AND EMPLOYEES

Another hot topic that may involve insurance coverage is the mandating of employees to be vaccinated. Many business owners have said they will mandate all employees to be vaccinated as a precautionary measure, however, not all employees want to be vaccinated. Here is a general understanding of vaccination mandates we learned in a recent webinar.

In general, an employer can mandate that all employees receive a COVID vaccination, if it can be determined there is a direct threat to other employees and or customers. If there are no other job/duties alternatives for the employee they can be terminated for not receiving the vaccine. It is highly recommended that you review each situation with an attorney familiar with your local and state EEOC laws to make any determinations regarding employees. If you do assert a vaccine mandate on employees you must be prepared to offer paid time off to receive the shot and time off for any ill side effects they may have.

Why might this involve insurance? If an employee sues for wrongful termination after refusing a COVID vaccine a general liability policy would not provide coverage for defense to your business. Employment Practices Liability would need to be in place and is sometimes over looked by the insured due to cost.

As we all adapt to this new normal there will be many hurdles to overcome with recovery of small businesses everywhere. The good news is that there appears to be light at the end of the tunnel and although it will be a slow process, things will eventually return to the way they were. Risk Management Services is here to help small businesses and answer any questions you may have regarding your insurance as you move forward. The topics we discussed today are just some of the questions we receive on a daily basis. Please reach out to us with any of your questions and or concerns going forward. We are happy to help.

RMS utilizes its long history of swimming related experience to help underwrite, broker, and manage highly developed insurance programs specific to the sport of swimming. Our interest in swimming began in 1978 when our founder, John Peterson was first introduced to United States Swimming (USA-S) as a broker via the Amateur Athletic Union (AAU). Mr. Peterson began managing the insurance program exclusively for USA-S in 1979 the year after the Amateur Sports Act had been instituted. Since that time RMS has successfully developed specialized insurance programs for the swimming community that allows clubs and athletes of all ages and abilities access to pools across the United States.