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 and insurance underwriters around the U.S.

Please note that we now have access to a liability insurer providing coverage for claims based upon or arising out of communicable disease (including COVID-19) as a standalone policy.  Almost all standard outdoor activity policies now exclude this coverage.  Let us know if you wish to obtain a quotation for communicable disease liability.

For those of our wilderness recreation clients with liability policies written through the standard O&G program at K&K/National Casualty Company, please contact us ASAP for further information on options for premium relief.  K&K has a resource page for COVID-19 issues.  Effective on all renewals dated 5/1/2020 and later, a Communicable Disease Exclusion will be added to and the Transmissible Pathogen Coverage will be removed from the policy.  This is due to the catastrophic potential of claims arising out of the COVID-19 virus pandemic when policyholders resume operations.  Standard program outfitter & guide Policies that renewed prior to 5/1/2020 will continue to have coverage for legal liability arising out of Transmissible Pathogens, including the COVID-19 virus, subject to all other policy terms, conditions and exclusions.  We have asked whether this exclusion can be removed with updated & acceptable risk management practices & procedures, and our inquiry is awaiting a response from underwriters/management.  We believe this exposure will be excluded in the foreseeable future due to the catastrophe nature at this time.

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 had coverage for liability claims brought alleging negligence on the part of the policyholder that results in transmission of COVID-19 virus, at the time of the shutdowns in March, 2020;  however, insurers are adding a Communicable Disease Exclusion on renewal of most policies.  A few policies may currently contain an exclusion.  Contact us if this question arises or 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) on your specific policy.

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).

Alaska:  Bulletins can be found on the Division of Insurance home page.  Additional information about premium relief can be found in specific bulletins.  For help in locating additional information, please contact our office.

California:  Insurance Commissioner Directive to Refund March & April 2020 Premiums on Commercial Auto, Liability & Workers’ Compensation Policies  Insurance Commissioner Recommendation to Extend Premium Payment Grace Period to 60 Days  As of May 15, 2020, the State of California has extended their directive regarding grace periods for payment of all policies and renewals to July 14, 2020.  A link will be provided when available (this is hot off the press).

Colorado:  Effective 3/27/2020 and until further notice, The Division of Insurance has directed all insurers to provide a moratorium on cancellations, extend any expiring policies and and defer any non-renewal underwriting actions, as well as extend payment grace periods and waive all fees for late payment.  See a copy of notice here.

Hawaii:  Effective 3/27/2020 Insurance Commissioner’s Guidance on businesses impacted by COVID-19 health crisis difficulties

Maine:  Effective 3/12/2020 Directive on Grace Periods for Payments Due and Cancellation for Non-Payment of Premium and Information Page on COVID-19 Insurance Issues and Notices From Bulletin 444: “Many property and casualty insurance policies calculate premiums based on exposure estimates made when a policy is issued. Examples of common exposure bases include miles driven, sales revenue, receipts, or payroll. Due to the far-reaching effects of the COVID-19 outbreak and local, state, and federal governments’ responses such as non-essential business closings and stay-at-home orders, initial estimates for many policyholders will be much higher than the exposure actually realized. The Superintendent encourages insurers to allow policyholders to self-audit and self-report changes in their exposure or risk profile and adjust premiums accordingly. For policies that are subject to audit, insurers are encouraged to allow self-auditing and self-reporting in lieu of physical audits to the extent that physical audits are impracticable.   These guidelines will apply until July 1, 2020, unless extended by the Superintendent.”

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;

North Carolina:  See NC news, bulletins, advisories and information page.  Contact our office for specific questions.  See also specific order to grant relief to businesses/organizations affected by the COVID-19 shutdown.

Oregon:  Emergency Order for Insurance Deadlines Extended to at least June 23, 2020  and FAQ (4/23/2020) and General Info on COVID-19 Pandemic Insurance companies of property & casualty insurance must provide a grace period of at least 60 days on all premiums due through June 23, 2020.  Claims must be paid through this grace period,

Washington:  Office 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

Feel free to call or email our office with any questions.  We are 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