Insurance Guidance for Businesses during Covid-19

The Covid-19 pandemic and subsequent measures to reduce the spread of the virus have stifled the economy and created difficult decisions for businesses, particularly business owners.  With municipal and provincial governments creating lists for businesses as either essential services or not many have had to adjust operations or close entirely to comply.  The effects of these changes on insurance policies are challenging as there might be new conditions that a business must meet to ensure coverage is provided.

Many insurance companies have offered to change conditions temporarily to allow businesses to maintain coverage but what are smart risk prevention strategies should a business still be in operation?

The least talked about exposure for the business, large and small, is still cyber risks. In particular email phishing scams and ransomware.  This type of threat and risk is often not publicly reported but is happening with greater frequency during the Covid-19 crisis.  Businesses, which have seen operations disrupted and providing far more service remotely and through virtual communications, are susceptible to cyber and email phishing attacks due to changes and strained resources.  People simply are not able to pay as much attention and they might not have the same infrastructure to protect them in a home or remote office. 

For more traditional retail operations that are not vacant or with reduced occupancy, there are other steps that can and should be taken for risk mitigation and compliance with insurance policy conditions.

  • Remove all perishable stock and inventory if it exists to avoid spoilage and damage. 
  • Secure valuable contents out of sight and in a place that is locked or with difficult access to avoid theft temptation
  • Review your insurance policy wordings to ensure that you visit and inspect your business location(s) to ensure there is no damage, that heating and water are functioning.  If possible, it might be prudent to shut off the main water supply that does not affect any sprinkler system
  • Ensure that vendors and customers are aware of change in operations and alternative locations for deliveries are made.
  • Any scheduled maintenance to sprinkler systems, fire suppression systems, and commercial ventilation is accommodated and completed.
  • Review cyber security protocols, security of any servers and equipment, and password protocols for all connected devices.
  • Check on smoke detectors, replacing batteries and check that equipment functions properly
  • Begin developing a return to operations plan for staff, suppliers and customers.

Businesses may be in a limited operations model for some time but the exposure to risk may not be as reduced as owners and managers might assume.  The challenges come as when things are out of sight they can often be out of mind, so regular check-ins matter with the physical location and systems as much as they do with the staff. 

If a commercial insurance policy is reviewed and some confusion exists with wordings and expectations of the insured, consult with your insurance broker who can provide you guidance directly from the specific company.  While business owners face many challenges during the Covid-19 crisis, insurance policy compliance can often slip by and not be thought of with the same importance.  Simply because businesses may not have people on sight to observe and maintain premises does not mean that a bit of time spent with a visit will not be without value.