Business-interruption claims and workplace-infection controversies are sending shockwaves through the insurance industry as employers work on detailed back-to-work safety policies and prepare for a second wave of coronavirus infections.
That’s the big picture according to a June 2020 survey of insurance professionals conducted by Wells Media Group.
The group’s Exclusive Property/Casualty Insurance Industry Coronavirus Survey reveals that 54% of insurance professionals believe insurers will resist legal and political attempts to force them to pay business-interruption claims attributable to the COVID-19 pandemic.
Hundreds of commercial policyholders around the US are suing their business insurance companies seeking coverage for losses caused by shutdowns during the health crisis.
Plaintiffs argue that their policies have no specific exclusions for losses due to viruses and that the shutdown should be covered because it was required by a civil authority order. Some seek coverage of physical property damage sustained due to government-mandated restrictive measures.
Insurers have pushed back, maintaining that a business interruption policy can’t be triggered unless direct physical loss or damage halts a business’s operation. Insurance professionals argue that their companies owe no coverage under most commercial property-insurance policies for losses caused by coronavirus closure orders.
The workplace infection controversy revolves around proving whether a worker contracted a viral infection on the job and is therefore entitled to compensation. Unlike a bone break or a muscle pull, where it is usually easy to tell whether the injury occurred at work, determining the infection point for viral diseases such as COVID-19 is much more complex.
While some states require nurses and first responders to prove they contracted COVID-19 on the job, others have simplified the process of claiming coverage for job-related infection for these workers.
Wells Media’s survey reveals that 55% of insurance industry professionals believe there should be a presumption that medical and other frontline workers who became infected with COVID-19 contracted the virus on the job so they can qualify for workers’ compensation coverage more easily. Meanwhile, 27% of respondents disagree and the remaining 18% can’t pick a side.
As workplaces start reopening, 45% of Wells Media’s respondents estimate that it will take at least a year to see a return to normal activity levels and revenues at their firms.