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Insurance Programs & COVID-19

We have been receiving many inquiries about the insurance implications behind the COVID-19 situation and PA Gov’s shut-down of “non-essential” businesses. Such a situation provides impetus for review of a lot of business related items and insurance should be no different. To keep you informed, we have put this page together discussing how your insurance program will likely respond.


Business Income Loss

Unfortunately, COVID-19 does not look to be an insurable event. Business Interruption Coverage or Business Income Coverage serves to protect your typical revenue in the event of property damage. We will continue to monitor government and carrier notifications and keep you apprised.

According to Chris Boggs, Executive Director of the Independent Insurance Agents and Brokers of America, “No, there is no business income coverage.” 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. Additionally, there is a specific property exclusion applicable to viruses that may (and generally will) apply. This is true of “standard” business income forms and while there may be proprietary forms that respond, these are very rare.


ISO (Insurance Services Office, country-wide standard coverage setting entity) and the industry will come up with new coverage forms that may provide coverage. For now, we are not aware of a carrier that has agreed to provide this coverage for the current COVID-19 problem.


Worker’s Compensation Coverage

While seemingly unlikely, Worker’s Compensation coverage is fair play when it comes to COVID-19. For coverage to respond, an employee must provide evidence that their illness was contracted at their place of employment. Generally, two things must be true for an illness to constitute as “occupational” and having been a result of ones job duties.

Here’s another take from Chris Broggs at Independent Agents and Brokers of America.

Two tests must be satisfied before any illness or disease, including the Coronavirus, qualifies as occupational and thus compensable under workers’ compensation:

  1. The illness or disease must be occupational,” meaning that it arose out of and was in the course and scope of the employment; and
  2. The illness or disease must arise out of or be caused by conditions peculiar” to the work.

Whether an illness arises out of, and in the course and scope of employment is a function of the employee’s activities. The simplest test toward determining whether an injury arises out of and in the course and scope of employment” is to ask: Was the employee benefiting the employer when exposed to the illness or disease? Be warned, this test” is subject to the interpretations and intricacies of various state laws.

Qualifying as occupational” is the relatively low hurdle. The higher hurdle is whether the illness or disease is peculiar” to the work. 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.


The later portion of evidence makes most claims for WC unlikely to be compensable at best.

We understand this time is quite volatile for most businesses and a lot of questions becoming top-of-mind. We are here to answer those questions. Feel free to contact us at 717.432.5595. We’ll be serving our customers at a “social distance” 😉