I am writing this to inform our clients, potential clients, and fellow business owners as to how Business Income, aka Business Interruption, Insurance Works. These times are unprecedented and businesses from small to large are impacted unimaginably.
The information below is my personal professional interpretation and explanation unless noted otherwise.
Can My Insurance Policy Cover My Lost Business Income During The Outbreak?
Unfortunately, the answer is simply no. For business interruption to apply, generally speaking, direct physical damage has to occur to your insured property. For example, if a fire or weather event damages your business property and you file a claim for those damages, business income will be covered according to the policy.
Here is the official standard policy language for business income:
“Business Income Coverage — commercial property insurance covering loss of income suffered by a business when damage to its premises by a covered cause of loss causes a slowdown or suspension of its operations. Coverage applies to loss suffered during the time required to repair or replace the damaged property. It may also be extended to apply to loss suffered after completion of repairs for a specified number of days. There are two Insurance Services Office, Inc. (ISO), business income coverage forms: the business income and extra expense coverage form (CP 00 30) and the business income coverage form without extra expense (CP 00 32). Business income coverage is also referred to as business interruption coverage.”
Also, one common exclusion on business insurance policies is “Virus or Bacteria.”
What are my options then?
As I am writing this on March 18th, some of the following resources are available for small businesses:
- WA Department Of Revenue: https://dor.wa.gov/about/business-relief-during-covid-19-pandemic
- WA Governor Small Business Resource Site: https://www.governor.wa.gov/issues/issues/covid-19-resources/covid-19-resources-businesses-and-workers
- For Seattle businesses only: http://www.seattle.gov/office-of-economic-development/small-business/small-business-program
How Can I Help My Employees?
If possible, find ways to have them work remotely. Unfortunately, that is not an option for a lot of businesses and industries. If that is the case, or their hours have to be drastically reduced, have them apply for unemployment benefits. In Washington, a great site to start is https://esd.wa.gov/newsroom/covid-19 There you and your employees can find answers to many frequently asked questions.
If you reside in Washington State and are looking for more information on other insurance regulations, please visit https://www.insurance.wa.gov/coronavirus
As we receive updates from our insurance company partners, we will share relevant information. Some important questions left to be answered are premium impacts due to closed businesses, will insurance companies suspend issuing new policies and what are our options if we cannot afford paying the insurance premium but still need to protect the business?
As always, our Team at the DOK Insurance Agency is here to help where we can. Some ways that we can help one another is to continue offering and using each other’s services. If you are still open for business, would like us share your business information on social media, please email firstname.lastname@example.org or give us a call at 425-242-5252. Please share your questions, advice and thoughts with us as well.
1500 Benson Road South, Suite 201
Renton, WA 98055