Gulfshore Insurance > Gulfshore Blog > Claims Management

Although the health and safety of our community is our number one priority during the COVID-19 outbreak, there are many concerns surrounding the degree and duration of disruptions to business activity and daily life. Mandatory and voluntary quarantines, social distancing to groups of 10 or less, restricted travel, and business closures are increasing measures being taken around the United States. These disruptions primarily affect businesses as they begin to lose inventory, revenue, and profit. From mom and pop shops, to tourism hot spots, concert venues, and restaurants the impact will be felt by all. Not to mention that this rippling affect will then be felt by suppliers, contractors, vendors, and service providers.

For insureds and insurers, once-hypothetical questions surrounding COVID-19 are quickly turning to familiar and regular insurance coverage questions such as the availability, scope and limitations of coverage, number of occurrences, exclusions, along with limits, sub-limits, deductibles and retentions. The claims that come out of COVID-19 will also provoke unique question and present their own set of challenges.

First-Party Business Interruption Coverage

First-party policies covering commercial property insurance provide coverage for business income loss by adding an endorsement to the insured’s property policy. This endorsement is designed to protect the insured for losses of business income it sustains as a result of direct loss, damage, or destruction to insured property by a covered peril. Although many such clauses are in use today, a typical business income insurance clause reads as follows:

“We will pay for the actual loss of business income you sustain due to the necessary suspension of your ‘operations’ during the period of ‘restoration.’ The suspension must be caused by the direct physical loss, damage, or destruction to property. The loss or damage must be caused by or result from a covered cause of loss.”

Physical Loss or Damage Requirement

BI coverage is often part of the commercial property policy a business holds. This form adds coverage, in certain instances, for lost business income, contingent business interruption losses, and losses due to certain action taken by civil authorities.

To obtain coverage resulting from the current COVID-19 crisis, the existence of the virus would need to constitute a Covered Cause of Loss, which results in physical loss of or damage to the covered property. This is unlike a fire, hurricane, or flood, which are common causes of losses that cause visible damage to property. As mentioned earlier, businesses are closing, even though there may be no apparent damage at all. But, if the coronavirus is found within the confines of a workplace or business, this arguably constitutes damage to the property, albeit at a microscopic level that cannot be seen.

Duration of Lost Income Claim

Each policy is unique with different definitions and measurements relevant to the period of restoration. Complications can also arise where an insured opts not to resume business operations. However, business interruption typically includes coverage for repair or replacement of property impacted, in addition to loss of business income through the date the damaged property is repaired or replaced.

Calculation and Adjustment of Accepted Claims

Unfortunately, insureds bear the burden of substantiating claimed BI losses. When a claim is being reported, it’s important for the insured to detail and retain documentation for all business activity, direct or indirect cause of any disruptions, and mitigation efforts. It’s also important to note that insureds should be able to value and substantiate losses by referencing business history, benchmarks, and forecasts.

If you have BI coverage on your policy and find yourself needing to temporarily close your doors, we recommend you file the claim with your insurance company. If you are usure if you have this coverage, I am more than happy to review your policy. At Gulfshore Insurance, we specialize in insurance and risk management for the restaurant industry and can answer any questions you may have.

Olivia Ferencsik, is a Client Advisor at Gulfshore Insurance. Olivia works with a wide range of business clients to deliver strategic risk analysis, guidance, and insurance. Comments and questions are welcome at oferencsik@gulfshoreinsurance.com

 

 

Hundreds of construction workers are killed every year from ladders and scaffolds, and many thousand more suffer serious injuries that are permanently disabling. And it is estimated that more than 30% of workers compensation claims costs stemming from construction sites are the result of falls from elevated surfaces.

A recent study indicated that injuries related to falls from elevated surfaces are more severe than other injury claims because these accidents result in more time away from work, damage to multiple body parts, and more short- and long-term disability leave.

Do Not Let These Accidents Happen to You

  • A worker, who was standing on the top of a stepladder, fell when the ladder shifted. He suffered a spinal injury and was out of work for four months.
  • Another worker failed to secure an extension ladder at the top and fell 20 feet when the ladder slipped away from the wall.
  • Two men were working high up in a building atrium when their scaffold collapsed. They plunged four stories to a concrete deck. One man was dead on arrival at the hospital; the other was in critical condition.
  • When a three-story wooden scaffold collapsed, two workers fell to the ground, suffering serious neck and back injuries. A third man working under the scaffolding was also injured.


It’s crucial for construction companies and their workers to implement regular safety training — and put that training to practice. Linked below are several helpful OSHA resources and fact sheets to improve worker safety at your organization:

LADDER SAFETY

SCAFFOLDING SAFETY

FALL PROTECTION

The Florida Office of Insurance Regulation announced that it has approved a rate decrease for workers’ compensation insurance in Florida. The 1.8% decrease was filed by the National Council on Compensation Insurance (NCCI) in a law-only filing resulting from the effects of the Federal Tax Cuts and Jobs Act. This applies to both new and renewal workers’ compensation insurance policies effective in Florida on or after June 1, 2018.

For more information about the filing, read the official release from the Florida Office of Insurance Regulation.

OSHA has again extended the deadline for employers to electronically submit injury and illness data — this time to December 15, 2017.

The electronic reporting deadline was set for December 1 after being postponed multiple times, but the agency decided to implement another two-week delay to give affected employers additional time to become familiar with the new electronic reporting system launched on August 1, according to a U.S. Department of Labor statement issued on Wednesday.

OSHA is currently reviewing the other provisions of its final rule and intends to publish a notice of proposed rule-making to reconsider, revise or remove portions of that rule in 2018, according to the statement.

Click here for Gulfshore Insurance’s additional resources and a comprehensive training guide on the new electronic submission process.

The Office of Insurance Regulation has received the 2018 Florida workers’ compensation rate filing by the National Council on Compensation Insurance (NCCI), which proposes a statewide average premium decrease of 9.6%. This includes a statewide average rate decrease of 9.3% and a reduction of the fixed expense cost applicable to every workers’ compensation policy in Florida from $200 to $160. The new rates would become effective January 1, 2018.

As always, the Office will review the filing to ensure the proposed changes are not excessive, inadequate, or unfairly discriminatory and evaluate its potential effects on the insurance marketplace and employers, who are required by law to carry this insurance on their employees. A public rate hearing will be conducted in October.

NCCI is a licensed rating organization authorized to make rate filings on behalf of workers’ compensation insurance companies in Florida. For more information about the filing, read the NCCI press statement.