Businesses in the United States and Canada have had to adapt to an unprecedented set of uncertain and rapidly evolving circumstances in recent weeks. According to a recent Goldman Sachs survey of U.S. small business owners, 96 percent say that they have already been impacted by coronavirus, or COVID-19.
Some businesses have reduced hours or shut down, either voluntarily or to comply with a government order, while others have changed operations or are manufacturing new products to help address severe medical supply shortages or just stay afloat.
If your business has changed in any way, your risk profile has likely shifted as well.
“Many companies are experiencing changes in their exposure to risk,” noted Tyson Peel, Vice President and Director, Property and Casualty, Burns & Wilcox, Toronto, Ontario. “To protect themselves, business leaders should make sure that their insurance policies are appropriate for their current needs.”
New products, new risk and liability potential
To meet a surge in demand for suddenly-scarce medical equipment and other health care-related products, manufacturers of all sizes have shifted to making items like hand sanitizer, personal protective equipment for care providers, respirators and ventilators.
Jeff Diefenbach, Senior Vice President and Managing Director, Burns & Wilcox, Detroit/Farmington Hills, Michigan, explained that manufacturers of all sizes and types—automotive, clothing, distilleries, breweries and more—that are now producing things that they have not made in the past should consult their insurance brokers and agents to determine whether their existing policies include coverage for these new products.
“Some manufacturers may only have coverage for products that are specifically described or named in their policies,” he said. “If a manufacturer suddenly starts making something different, their current policy language may or may not extend coverage to this brand-new product.”
According to Diefenbach, manufacturers may obtain coverage for any and all products they produce under a Commercial General Liability Insurance (CGL) policy or a standalone Products Liability Insurance policy. If products covered by the policy were to cause bodily injury or property damage, CGL and Products Liability Insurance can help mitigate hefty costs.
If a manufacturer has created a new design or altered an existing design, a Manufacturers Errors & Omissions (E&O) or other Professional E&O Insurance policy may be needed to address any potential liability risks or other risks for losses due to errors in judgement, design or omissions.
Be sure you are covered for new sales or deliveries
Bars and restaurants in a number of communities have adapted to public health orders against dine-in services by selling pantry staples in addition to their regular menu offerings, to better serve their communities and bring in additional revenue.
Grocery stores, restaurants and bars are now adding or expanding their existing delivery services to meet the demand from those engaging in social distancing and placing orders online or by phone.
Changing the types of goods a business sells or services it provides may necessitate a change to its existing CGL Insurance policy or a new type of coverage altogether. “Businesses that add delivery services are adding the risk that comes with automobiles driven by employees or third parties delivering food on their behalf,” explained Rich Gobler, Corporate Senior Vice President and Managing Director, Burns & Wilcox, San Francisco, California.
“A bar or restaurant owner does not have control over employees or third parties while they are driving around and making deliveries,” added Diefenbach. “If the delivery person were to cause an accident, the restaurant owner could potentially be held liable for damages because the individual involved was providing a service on his or her behalf.”
Businesses that add delivery service or expand their existing goods or service offerings should consult with their insurance broker or agent on their existing coverage for losses related to deliveries or the sale of new goods. Insurance experts can help determine the best Auto Liability policy to help mitigate risks or liability for bodily injuries or property damage involving delivery drivers, whether they are full-time employees, temporary or volunteer staff or drivers for a third-party service.
Temporary shutdowns could affect property coverage
According to Peel, businesses that shut down—even temporarily—should notify their insurance brokers and agents of this change in status, as it can have an impact on their Commercial Property or Premises Liability Insurance policy coverage.
“Many policies include coverage for a 30-day grace period during which your property can be vacant,” Peel said. If you fail to notify your broker or agent that your business is closed and your property is vacant within those 30 days, your insurer may deny claims for losses incurred subsequent to the grace period.
Commercial Property helps to mitigate losses related to property damage from storms, vandalism and accidents as well as theft and other events. Premises Liability coverage can help protect property and business owners from costly litigation stemming from bodily injuries sustained at a place of business. Business owners are held responsible for keeping their premises safe, whether occupied or vacant.
Maintaining coverage, communication critical in challenging times
To ensure that your business maintains vital coverage to help protect your assets and mitigate losses, staying current on insurance policy premiums is essential. If you are experiencing difficulty making your payments on time, inform your insurance broker or agent. Your insurance carrier may offer a grace period to eligible policyholders.
As communities continue to grapple with the impacts of coronavirus, new resources and challenges are emerging for affected businesses and individuals. Keeping the lines of communication open with expert insurance brokers and agents who can provide informed and effective guidance can help business owners better address changing conditions.