BUSINESS
Business Insurance Policies
For the Coronavirus-era
ALPHASPIRIT/123RF It’s common knowledge that COVID-19 has dramatically
changed the face of business. However, what’s less commonly
known is that business insurance is struggling to
keep up. With so much uncertainty, business owners and
operators need to be prepared when positioning their business
ahead of this year’s renewal.
As businesses continue to feel the effects of COVID-19
on their operations and revenue, many are looking to their
property and casualty coverages for relief. While some claims
have been denied outright, many more are still under review.
Some may even head toward litigation. What’s more, the
market is hardening and increases across the board should
be expected. Here’s how to prepare best.
Business interruption insurance
Unprecedented business closures have led to a growing
number of business interruption claims under the business
income/extra expense (BI/EE) coverages contained within a
commercial property policy. BI/EE coverages include shutdowns
imposed by a civil authority, but these coverages are
designed to cover direct physical loss or damage to property,
often caused by fire, lightning, wind, hail or theft, and are not
intended to respond to a virus or pandemic which fail to meet
the definition of direct physical loss. For this reason, claims
that aren’t denied immediately are likely to play out in various
forms of litigation. Insurance carriers are also keeping a
close eye on provincial legislation that could require carriers
to pay for BI/EE claims, regardless of the policy language.
For 2020, this means carriers who include BI/EE as part of
their offering will likely place additional scrutiny on requested
limits and may revise their renewal offerings. For example,
some American businesses that currently hold BI/EE policies
with expiring limits of US$20 million may be offered as
little as US$5 million in coverage at renewal – and Canadian
By Travis McElvany, HUB International
PILING CANADA 45
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