the conservation alliance

COVID-19 Pandemic Crisis and Your Insurance Policy

March 26, 2020
As our country reels from the impacts of the COVID-19 pandemic crisis, numerous questions arise everyday about your insurance coverage, insurance premium and payments, due to shutdown of business, both voluntary and government enforced/recommended.   I will try to update this information periodically.  We are constantly receiving guidance and updates from insurance regulators around the U.S.

Most insurance companies and programs we work with are not issuing cancellation notices for non-payment of premium at this time and are extending the grace period for payment of premium.  Several state insurance regulators have instructed insurers and their partners to extend the grace period on payments and claim reporting requirements, extend coverage and refrain from issuing cancellation notices at this time.  The guidance varies from state to state.

In general, most of our policyholders would have coverage for liability claims brought alleging negligence on the part of the policyholder that results in transmission of COVID-19 virus;  however, a few of our policies may contain an exclusion, and this is subject to the policy terms, conditions and exclusions of your specific policy.  Contact us if this question arises and you have questions about legal liability coverage for COVID-19 issues (claims or lawsuits made against the policyholder due to a client or third party contracting COVID-19 virus arising from your negligence).  

For Business Interruption coverage on a Commercial Property Policy, covered loss to property due to a covered peril must first exist to trigger business interruption coverage.  For almost all our customers, this would require a specific contamination event that impacts inventory or product/materials used in the production process (e.g. materials or supplies used in the manufacturing process or inventory of a retail store).  Many of these policies now contain a virus exclusion, so the likelihood of a business interruption claim is slim.  If you believe you may have a claim due to these circumstances, please contact us with the details.

We will try to email a copy of incoming directives from state insurance regulators, as they are received by our office, but please check your state insurance regulator’s web site by searching online for [name of your state] + [department of insurance] and click on COVID-19 links from their home page.  We are receiving numerous directives daily, but not all deal with the issues our clients are facing (many directives deal with telehealth services and protection of those working for the state regulators and insurance companies).

We have received communications from the states of Oregon and Washington and others, and these directives and guidance are received daily:
WashingtonOffice of the Insurance Commissioner Order to Extend Policies & Grace Periods to 5/9/2020 Press Release of 3/25/2020  Emergency Order 2020-03  and Claims Advisory and Guidance to Allow Contract Delivery Drivers in Personal Vehicles – Washington OIC FAQ About Directive
Oregon:   Order to Extend Payment Grace Periods and Renewals Indefinitely (3/25/2020)
CaliforniaInsurance Commission Recommendation to Extend Premium Payment Grace Period to 60 Days 
New York:  the Department of Financial Services issued guidance to all regulated entities as follows (Updated 4/2/2020).  Please see FAQ from NY Dept of Financial Services Dated 4/2/2020

 1) Offering payment accommodations, such as allowing consumers to defer payments at no cost, extending payment due dates, or waiving late or reinstatement fees, where consumers are unable to make timely payments of premium or fees due to COVID-19-related disruptions;

 2) Working with consumers to avoid cancellation of insurance policies for (a) failure to pay premiums on time, (b) discovery of acts or omissions that may have increased the hazard insured against, or (c) physical changes in the property insured subsequent to issuance or last renewal that result in the property no longer meeting the insurer’s underwriting standards;

Feel free to call or email our office with any questions.  We are short staffed at the moment due to retirement of a customer service representative and swamped with questions dealing with the difficult business shutdown due to the COVID-19 pandemic.  I am in the office every day, along with my technical assistant David LeClair.  Our bookeeper Trisha Bruce continues to work remotely from her home in Wilmington. 

Insurance brokers are currently considered essential businesses in NY and our office remains fully functional.   I hope this information will answer some of your pressing questions as we navigate a difficult and frightening health situation.  We wish you, your families, organization, staff and volunteers safe passage through the crisis.

Sincerely Yours,

Don Pachner, President
Pachner & Associates, LLC
Pachner Risk Management, LLC

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