What do you say to your restaurant-owning clients when they ask about the Business Interruption (BI) coverage on their Business Owners Policy (BOP) arising out of the Coronavirus? You might be tempted to respond “It’s not covered.” But what you should say is, “I will submit a claim to the carrier for you.” OK, as an insurance professional, you know that standard BOPs typically only cover BI arising out of direct physical damage. So, why send it to the carrier?
First, it might be covered, because the BOP could be non-standard, or the insurer may choose to cover the claim just to be humanitarian.
But the second (and best) reason has to do with your Agency Errors & Omissions (E&O) exposure. If you tell your insured it’s not covered, you have just put your agency E&O policy on the line, because you are not the insurance company. Your agency E&O policy might now be the remedy, especially if the poor restaurant owner appears before a sympathetic judge or jury. Any denial of coverage by an insurer puts you and your agency at risk…but if you do the denial yourself, you become the ‘deep pocket’.
As we journey down this rocky road, we will see issues arising with all classes of professional liability, workers compensation, general liability, benefits, event cancelation…almost all coverages a typical insurance agent handles. Just to ‘play it safe,’ as they say these days, we offer these points as opinions to help you navigate that rocky road. Contact us – we’re here to help!
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