COVID-19 raises a number of liability concerns, particularly if guests, customers or employees allege they became sick due to a business’s negligence. When it comes to these concerns, it’s important to take the following insurance considerations into account:
- General Liability Insurance—General liability insurance, sometimes referred to as commercial liability insurance, protects your business from financial loss should you be liable for property damage or personal and advertising injury caused by your services, business operations or employees. It can protect you from costs associated with bodily injuries, damage to third-party property, personal injuries, medical expenses, litigation and more. When it comes to COVID-19, general liability policies should provide coverage and allow you to defend claims. It should be noted that, in order for a claim to be valid, the claimant would have to allege the virus was contracted due to the insured’s negligence and detail how, when and where they got sick—all of which could be difficult to pin down. In recent years, insurance carriers began including exclusions to limit coverage related to bacteria, virus and communicable diseases. Policyholders should review exclusions and endorsements with a Deeley advisor to understand how their policy would respond.
- Directors and Officers (D&O) Insurance—Shareholders and other stakeholders could sue a business should they fail to respond appropriately to COVID-19 concerns. Specifically, stakeholders may contend that management failed to develop adequate contingency plans or detail how COVID-19 could impact the company’s financial performance. It should be noted that most D&O policies exclude coverage for bodily injuries, but may offer some protection depending on the specific allegations. As such, it’s important for businesses to review the scope of their D&O policies to confirm they are covered in the event of an incident.
As with any loss, policy wording is critically important and could make all the difference when it comes to responding to claims. Policyholders should review exclusions and endorsements with a Deeley advisor to understand how their policy would respond.