The Covid-19 Coronavirus is now spreading around the world, including the US. We are likely to see an uptick in cases in the coming weeks and months. There is potential for a prolonged and widespread outbreak in the US. As we’ve seen with South Korea, cases can spike from double digits to thousands in just a week or two.
One question that keeps coming up is:
Does insurance cover business interruptions when supply chains can’t deliver, or employees can’t come in to work?
The answer is, in most circumstances, No. Broadly, these are considered business risks, not insurable risks. Insurable risks in business interruption follow a direct physical loss, like fire, water, etc. Sickness is not a direct physical loss, though it may feel that way. This is one reason the stock market took such a beating last week: many of the losses businesses expect are not insured or insurable.
Corona Virus impact on your business
One way or another, your business is likely to be affected by this outbreak. The best way to protect your business is to protect your employees, including by setting them up to work from home. This limits person-to-person contact and reduces the risk of your employees infecting each other which ultimately reduces the risk to your business. Not every business can have its employees work from home, but if you think you can make it happen, it’s strongly recommended to get set up now.
We hope you found this information helpful. For general information on the Covid-19 virus, see our other article: https://www.agordon.com/commercial-insurance-blog/preparing-for-the-coronavirus
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Business Response Planning from the CDC
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