1. Make an inventory of risk pathways that could affect your business.
- Identify potential sources of liability if your business were impacted by COVID-19.
- Failure to take adequate measures to prevent exposure of customers to infection from employees or contaminated premises
- Failure to meet contracted-for requirements
- Management failure to train employees to avoid transmission and to plan adequately for impacts, with concomitant claims by shareholders, regulatory authorities, customers, third parties
- Other?
- Identify other constituencies that might be affected by disruption to your business and risks associated with such disruption.
2. Before any disruption occurs, identify and review insurance products that may respond.
- First-party Property and Business Interruption insurance – for stoppage or slowdown of your own business, typically due to contamination of property (but usually not available for direct person-to-person transmission)
- Contingent Business Interruption (CBI) or Supply Chain Risk insurance – for disruption of supply chains and, potentially, markets
- Commercial General Liability (CGL) insurance – for liability to third parties arising from bodily injury or, potentially, personal injury or property damage (including direct person-to-person transmission, as well as contamination of property)
- Directors & Officers (D&O), Management Liability, Errors & Omissions (E&O), and Professional Liability insurance – for claims that management personnel failed to take appropriate measures to protect the business or third parties (including direct person-to-person transmission, contamination of property, or secondary effects such as financial losses)
- Event Cancellation insurance (with extension for Communicable Disease)
- Travel Insurance
- Workers’ Compensation insurance – adopt protocols and procedures to help employees make a record establishing work-relatedness in submitting claims
3. Review business contracts to assess whether you are obligated to provide coverage to customers/clients, joint venture partners, contractors or others for risks outlined above.
4. Review customer contracts to assess whether you are entitled to coverage provided by customers/clients, joint venture partners, contractors or others for risks outlined above.
- If so, request copies of relevant insurance policies (not just certificates of insurance) and review them to assess potential coverage.
