Last Friday during the daily White House coronavirus briefing, President Trump weighed in on business interruption claims stating that he “would like to see the insurance companies pay if they need to pay.” Trump also said there’s “an exclusion” for pandemics “in some cases,” but “in a lot of cases, I don’t see it.” Many commercial insurance policies exclude business interruption losses due to virus-related damages and only cover business interruption losses when the insured premises are physically damaged.
TO SIR, WITH LOVE
Seven Republican senators warned Trump in a letter trying to change the business interruption policies. The letter informed Trump that business interruption insurance typically does not cover pandemics absent an explicit rider that insured were never charged premiums for that risk and insurers did not reserve for or hold capital against potential future loss. The senators also said they’re skeptical about efforts to create a TRIA-like solution for future pandemics.
NO WAY OUT
Major insurance trade associations and policyholder groups joined together to request the creation of a federal recovery fund to help provide liquidity to businesses impacted by the COVID-19 pandemic. The proposed COVID-19 Business and Employee Continuity Recovery Fund (“Recovery Fund”) is modeled after the 9/11 Victims Compensation Fund. It would be funded by the federal government and overseen by a special federal administrator under the Treasury Department. This seems to be picking up steam versus allowing states to rewrite insurance policies through legislation to cover COVID-19 business interruption claims.
THEY CALL ME MISTER TIBBS!
California Insurance Commissioner Ricardo Lara and the Department of Insurance issued a notice requiring insurance companies and other Department licensees to comply with their contractual, statutory, regulatory, and legal obligations to fairly investigate all business interruption claims caused by COVID-19. Lara issued the notice after receiving numerous complaints from businesses, public officials, and other stakeholders that were dissuaded from filing a claim under business interruption coverage or not having their claims investigated. Lara specified that only after a thorough, fair, and objective investigation of a claim, the insurer must accept or deny the claim, in part or whole. Business interruption discussions will continue to develop, and we’ll keep you up on the latest.
Kentucky Gov. Andy Beshear issued an executive order last week expanding workers’ compensation to front line workers exposed to COVID-19. Not only does the expansion cover first responders and healthcare workers, but also grocery store, postal, and childcare workers as well as domestic violence shelter and child advocacy workers. Workers’ compensation benefits would be available to employees in one of the mentioned fields that have been removed from work by a physician due to occupational exposure to COVID-19. Missouri Gov. Mike Parson also announced that changes had been made to state regulations to expand workers’ compensation benefits to first responders who contract COVID-19 during the state of emergency.
In an emergency ruling Monday, the Illinois Workers’ Compensation Commission (IWCC) passed an emergency amendment that created a rebuttable presumption that first responders and front-line workers who contract COVID-19 as work-related injuries during the state’s state of emergency. First responders, correction officers, healthcare workers, and crucial personnel who work in specific essential businesses and operations identified in Gov. Pritzker’s Stay-at-Home Order. The IWCC is holding an emergency hearing by telephonic means today at 4:00 p.m.
Making Our Way Around the Country
SUPERMARKET & FOOD RETAIL
The U.S. Food and Drug Administration (FDA) announced a comprehensive list of best practices to protect workers and consumers in essential businesses feeding Americans during the pandemic. Many of the guidelines reiterate practices already in place but they also emphasize what companies should do to protect employees and maintain a safe workplace during the outbreak. This includes assessing workers’ health before they start a shift, wearing face masks and gloves, and protocols for cleaning and disinfecting if an employee is infected with COVID-19. The FDA guidelines include contract workers, such as drivers of food delivery companies. The guidelines, however, are not mandates, but recommendations.
Insurance Commissioner Ricardo Lara ordered insurance companies to return insurance premiums to consumers and businesses and provide much-needed financial relief during the COVID-19 emergency. The bulletin covers premiums paid for at least the months of March and April – possibility May – in at least six different insurance lines. Those include: commercial auto, workers’ compensation, commercial liability, any insurance line where the risk of loss has fallen substantially due to COVID-19. A premium refund will not require prior approval by the Department of Insurance (DOI) if the insurance company follows certain methods outlined in the bulletin. All insurance companies must report back to the DOI all premium refunds they have issued or expect to issue in the next 60 days.
My family is in week five of staying home and staying safe, and we’ve been spending time watching the Marvel movies together. I still have fairly young ones at home who still want to go to school and see friends so every day we talk about why we’re staying home – to protect Nana, Grandma, postal workers, garbage workers, doctors, hospital workers, grocery store workers, the list goes on and on. Keep good deeds and people at the forefront. Stay safe and stay healthy.