Does business interruption insurance cover my business income due to COVID-19?
I am writing this to inform our clients, potential clients, and fellow business owners as to how Business Income, aka Business Interruption, Insurance Works. These times are unprecedented and businesses from small to large are impacted unimaginably.
The information below is my personal professional interpretation and explanation unless noted otherwise.
Can my insurance policy cover my lost business income during the outbreak?
Unfortunately, the answer is simply no. For business interruption to apply, generally speaking, direct physical damage has to occur to your insured property. For example, if a fire or weather event damages your business property and you file a claim for those damages, business income will be covered according to the policy.
Here is the official standard policy language for business income:
“Business Income Coverage — commercial property insurance covering loss of income suffered by a business when damage to its premises by a covered cause of loss causes a slowdown or suspension of its operations. Coverage applies to loss suffered during the time required to repair or replace the damaged property. It may also be extended to apply to loss suffered after completion of repairs for a specified number of days. There are two Insurance Services Office, Inc. (ISO), business income coverage forms: the business income and extra expense coverage form (CP 00 30) and the business income coverage form without extra expense (CP 00 32). Business income coverage is also referred to as business interruption coverage.”
Also, one common exclusion on business insurance policies is “Virus or Bacteria.”
What are my options then?
As I am writing this on March 18th, some of the following resources are available for small businesses:
- WA Department Of Revenue: https://dor.wa.gov/about/business-relief-during-covid-19-pandemic
- WA Governor Small Business Resource Site: https://www.governor.wa.gov/issues/issues/covid-19-resources/covid-19-resources-businesses-and-workers
- For Seattle businesses only: http://www.seattle.gov/office-of-economic-development/small-business/small-business-program
How can I help my employees?
If possible, find ways to have them work remotely. Unfortunately, that is not an option for a lot of businesses and industries. If that is the case, or their hours have to be drastically reduced, have them apply for unemployment benefits. In Washington, a great site to start is https://esd.wa.gov/newsroom/covid-19 There you and your employees can find answers to many frequently asked questions.
If you reside in Washington State and are looking for more information on other insurance regulations, please visit https://www.insurance.wa.gov/coronavirus
Take care of yourself and your community
We know most businesses and individuals have been hit especially hard by the COVID-19 pandemic, pushing America into a mental health crisis. Anxiety and depression are rising since many individuals are struggling to stay afloat.
Taking care of your friends and your family can help relieve stress, but remember that it should be balanced with care for yourself as well. Helping others cope with stress, such as simply providing social support, can also make your community stronger. Here are two informational articles you can read and share with those struggling to better understand their situation and lead them to find a safe and supportive environment, especially during these times:
- Guarding mental health during COVID-19 pandemic – https://www.rehab4addiction.co.uk/coronavirus/mental-health-coronavirus
- Helping others cope with their stress – https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/prevention.html
As we receive updates from our insurance company partners, we will share relevant information. Some important questions left to be answered are premium impacts due to closed businesses, will insurance companies suspend issuing new policies and what are our options if we cannot afford paying the insurance premium but still need to protect the business?
As always, our Team at the DOK Insurance Agency is here to help where we can. Some ways that we can help one another is to continue offering and using each other’s services. If you are still open for business, would like us to share your business information on social media, please email firstname.lastname@example.org or give us a call at 425-242-5252. Please share your questions, advice, and thoughts with us as well.
A: 1500 Benson Road South, Suite 201 Renton, WA 98055
Dominik was a German exchange student in high school before graduating from the University of Washington in Business Administration – Information Systems and Retail Management. His insurance career started in 2008 when he decided leave his retail management career behind to start his own business. His American Family Insurance agency quickly grew to service 700 clients and families. While the idea of becoming an independent broker started in 2010, a horrific car accident put that plan on hold. In 2014, Dominik and his wife Michele changed from a captive agency to become the independent agency that you see today.
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