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Business Insurance & COVID-19

COVID-19 and Business Insurance Coverages

As the coronavirus outbreak spreads around the globe, people are asking their brokers and agents, “Does my policy cover a loss caused by Coronavirus (COVID-19)?” They want to know what protections are provided by their insurance policies for losses they might incur if the outbreak reaches pandemic levels. The answer is, “It depends…”

Below is a quick overview summarizing how various coverages could respond to a COVID-19 claim:

Property Insurance

Many insureds are worried about their loss of income or revenue if they must shut down due to an outbreak of COVID-19 in their facility. However, most standard property policies require that there be direct covered damage (physical loss) to the property to trigger the business interruption coverage. There could be some coverage if a civil authority restricts access to the insured location – but carriers are giving mixed responses when asked.

General Liability Insurance

General Liability coverage will protect the organization if a third party (client, for example) were to claim bodily injury because the organization did not take reasonable precautions to prevent exposure to the virus. Some policies may have exclusions for epidemics or pandemics – so the policy must be carefully reviewed. Proof that your organization was at fault may be difficult for the claimant to provide.

Workers’ Compensation

If your employee is infected and the infection arises out of the course of employment – they are exposed on the job – then their lost time and medical costs may be covered by Workers’ Compensation insurance. Make sure to document with the carrier immediately if you suspect this to be the case – as soon as you know they were exposed and before they are showing symptoms. Due to HIPAA, and other privacy laws, employers must be careful when inquiring about an employee’s illness.

Directors & Officers

Directors could be held liable for failing to develop contingency plans or failing to observe recommended protocols by impacted third parties. Employees could potentially make claims against the Directors if they feel they were mistreated because they were infected.

International Liability/International Workers’ Compensation

These policies are nonstandard with manuscripted coverages and have additional exclusions. Each policy should be scrutinized if you think your organization has risk of exposure.


Every policy is different, and carriers may respond with new exclusions or policy terms that require timely notice, so it is important to review changes at renewal.

Request an analysis at if you would like for us to review your policies and provide a personalized assessment. Stay healthy, safe and be good to one another.

~Shepherd & Associates Insurance Services, Inc.

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