COVID-19 / Novel Coronavirus Pandemic Insurance response

Dear Valued R.K. Tongue Co. Client,

Over the last week, The U.S. Federal Government, State Governors and Senior Officials throughout most of the U.S. have declared states of emergency, closed schools, cancelled large gatherings and banned or restricted travel.  Most business-owners and employees of U.S. corporations are confronting the prospect of decreased revenues, supply shortages, and possible closure or remote-work mandates.  Many of those business-owners and employees are looking to their risk management and insurance professionals for guidance.

In these unprecedented times, the R.K. Tongue Co., Inc. (RKT) team takes its risk management and insurance advisory role seriously.  We have already begun implementing business continuity plans to facilitate our ongoing ability to serve your insurance needs.  Additionally, and based on recurring questions, we have put together the following FAQ response and general assessment of the U.S. Domestic insurance landscape as it applies to viral outbreaks and pandemics:

  • Commercial business interruption insurance generally specifies direct physical damage to a covered property as a coverage trigger. A pandemic does not constitute direct physical damage in the context of commercial property & casualty insurance
  • Employees who contract the novel coronavirus virus due to a work-related exposure, may experience a covered workers comp/employer’s liability claim
  • If a business-owner or an employee gets sick or needs testing, such medical needs are likely a covered health insurance claim
  • The effects of the novel coronavirus and related COVID-19 disease are likely to be covered by short-term disability and may possibly be a covered long-term disability income and/or overhead expense disability claim if the sickness lasts long enough to meet applicable waiting periods
  • Specific “pandemic insurance” for business interruption is generally rare.  RKT has recently become aware of a London-based specialty market that may offer insurance protection for future pandemics, but this insurance cannot be purchased during an ongoing viral outbreak/pandemic.  RKT was also recently made aware of a Canadian insurer that offers an optional business interruption insurance rider for pandemics as part of its business insurance policy.  Although we do not know many specifics about this product or its limitations and exclusions, we know that it is not available in the U.S.

Because news about the novel coronavirus breaks rapidly and the response to the pandemic is so fluid, we encourage you to contact our office or the concerned insurance company directly if you experience an adverse event and need to file a claim. 

We understand and share your concerns, fears, and business challenges.  We will provide updates to you, our valued clients, as circumstances dictate.  Please take all relevant precautions to stay safe and healthy.