In these uncertain times, it is essential to work closely with your trusted insurance and risk management advisor to help develop strategies for your business.

The coronavirus (COVID-19) pandemic is currently a top business concern and disruptor for waste collection businesses. As waste collection insurance and risk management specialists, we have been getting questions from our clients about insurance and risk management strategies related to COVID-19. Below are answers to common questions and our recommended risk management strategies. Keep in mind that this is an ever-changing situation, and this information is current as of mid-April 2020.

Does Business Interruption Insurance Coverage Help if My Business is Shut Down or Cannot Get Critical Supplies Because of COVID-19?
Insurance policies will generally not apply to business disruptions related to COVID-19. Under typical policy language, coverage is activated by a direct physical loss (for example, a fire or building collapse). While there is some litigation surrounding this topic, the transmission or potential presence of a virus is not expected to qualify as a form of direct physical loss. It is possible that a court decision or an act of Congress could change this position, though neither is viewed as likely at this point in time.

If My Business is Affected, Should I File a Business Interruption Claim with My Insurance Carrier?
While it is unlikely that coverage would apply under the existing framework of laws and policy language, some companies have elected to put their carriers on notice of a potential claim. There is generally no harm in doing so. That said, if you are considering filing a formal claim, you should discuss your situation with your broker and potentially a coverage attorney. Business Interruption claims are highly complex, and if the carrier denies your claim (which is likely), you may be required to act very quickly to dispute or accept the carrier’s decision.

Once the Dust Settles on the COVID-19 Pandemic, Will There Be Insurance Coverage to Address Similar Events in the Future?
The magnitude of economic loss through this pandemic is likely to be valued in the trillions of dollars. While a hypothetical “pandemic insurance” product would only cover a portion of such losses, it is unlikely that the private sector could carry enough capital in reserve to make such insurance viable. Therefore, we believe the only way such coverage will exist is if Congress creates a federal program to fund it (similar to terrorism insurance). There are already early stage efforts to develop such a program, and we expect to know more about that possibility in the coming months.

If an Employee Becomes Sick or Passes Away Because of COVID-19, and the Evidence Suggests They Caught it at Work, Will They Be Able to Get Workers’ Compensation Benefits?
This will likely be determined by insurance carriers and state-level Workers’ Compensation boards on a case-by-case basis. In general, we believe the issue will hinge on whether an employee became sick not simply while at work, but because of the nature of their work. We believe employees in healthcare-related fields or front-line essential workers (e.g., grocery store employees) are more likely to be entitled to Workers’ Compensation benefits. In the end, state Workers’ Compensation boards will be the arbiters of these decisions, and we have not seen enough activity to know how that will play out.

What Other Types of Claims Should Businesses Look Out for During the Pandemic?
General Liability: You may see potential claims if you have someone come onto your premises or a jobsite and become sick with COVID-19. A claimant may argue that you were not taking proper precautions, or that you were aware of a heightened level of risk at your facility that you did not disclose. To protect against these claims, we recommend you closely follow CDC and OSHA guidance related to COVID-19 safety measures.
Workers’ Compensation: Historically, there has been a relationship between economic downturns, layoffs and Workers’ Compensation claims. People have more incentive to file claims when they feel economic insecurity. It is especially important to keep detailed logs of workplace injuries and to closely follow your company’s safety procedures.
Employment Practices Liability: We understand many companies are looking to reduce payroll, whether through furloughs, layoffs or salary cuts. When making these decisions, it is critical to review your process to make sure it is fair and free from discrimination. We recommend consulting with an attorney and/or HR expert before taking any action.

If You Are Facing Budget Pressure Because of Revenue Loss, What are Some Things You Can Do Today to Reduce Your Insurance Spend?
The first option is a mid-term endorsement to re-project sales and payrolls. Normally any difference between actual and estimated figures is resolved by an audit at the end of a policy term, but you may be able to negotiate an adjustment during the term.
Second, if you have employees who are being paid to sit at home or do light duty, you may have the ability to reclassify them into a lower-rated code for Workers’ Compensation (this will depend on the specifics of your situation). Third, if you have a large fleet of vehicles and you are certain you will not be using some of them for a period of time, you may be able to suspend coverage, which would result in a premium credit once they are put back into service. Depending on your specific circumstances, other options may be available. We would encourage you to discuss these with your broker.

When It Comes to My Operation’s Physical Space, What Are Some Things That We Should Be Doing Right Now to Mitigate Risks?
Take appropriate precautions to keep your employees safe and to minimize the chance that you are actively spreading the virus. Educate your employees on safe practices and minimize the need for workers to be near each other. Many businesses are implementing practices such as staggered shifts, limits on the number of people in lunchrooms or break rooms, and revised workflows to minimize contact. Consider temperature screenings or questionnaires about possible exposure and do everything you can to provide access to personal protective equipment. Limit unnecessary access to your office/facilities as much as possible. Most importantly, ensure your employees do not come into work if they are feeling sick, and avoid putting them in a position where they feel pressure to do so.

How Can We Minimize Potential Workers’ Compensation or Employment Practices Claims?
The most important element is maintaining trust with your employees. Engage with your team and keep them informed about your plans, the impact of COVID-19 on your business, and how you are managing it. If you need to take employment actions, do so carefully and maintain detailed written documentation. If you have employment practices liability insurance, your carrier might provide access to an attorney for guidance and best practices. Additionally, work with your benefits advisor to clearly understand what benefits you can or cannot offer to your laid-off/furloughed employees. As always, make sure you are reviewing all actions to ensure they are not unintentionally biased or discriminatory.

The Importance of an Insurance and Risk Management Partner
In these uncertain times, it is essential to work closely with your trusted insurance and risk management advisor to help develop strategies for your business. Your advisor can help you manage your insurance strategies, provide updates on legislation and regulatory guidance, and help with your risk management strategies. Additionally, when the time comes, your insurance advisor can help develop a comprehensive return to work program for your organization. | WA

RBN Insurance Services (Chicago, IL) is an experienced team of insurance and employee benefits brokers. Their professionals work with businesses to assess risk, identify cost-efficient approaches to insurance, and negotiate with carriers to deliver comprehensive options at a competitive price. RBN Insurance Services excels in working with higher-risk, higher-complexity operations where insurance can be hard to place and insights can be differentiating. For more information, visit