Friday the 13th! Weekly Round Up

Did you know that Friday the 13th occurs in any month that begins on a Sunday? Quite simple math but I never really thought about it! The fear of Friday the 13th affects an estimated 17 to 21 million people in the United States, according to the Stress Management Center and Phobia Institute. However, studies on accident trends show that fewer accidents are reported on this day, as people are likely more cautious and limit travel and activities. You can find more interesting tidbits on the history of Friday the 13th at Earthsky.org

Here are our highlights from the week

Veteran’s Day 2020

The United States just honored its Veterans with the observance of Veteran’s Day. The anniversary of Veteran’s Day marks the end of World War I back in 1918. Originally coined as Armistice Day, to reflect the signing of the armistice between the Allies of World War I and Germany, was renamed Veteran’s Day in 1954 to honor all those that have served in the U.S. Military. November 11th is also celebrated by other countries as Armistice Day and Remembrance Day. While times have certainly changed for our Country since the early 1900’s, I thought sharing the below quote from President Woodrow Wilson, on the first anniversary of such an important day, was fitting for the times.

“To us in America, the reflections of Armistice Day will be filled with solemn pride in the heroism of those who died in the country’s service, and with gratitude for the victory, both because of the thing from which it has freed us and because of the opportunity it has given America to show her sympathy with peace and justice in the councils of nations.” You can find more on the History of Veteran’s Day, here at U.S. Department of Veterans Affairs

The U.S. Department of Veterans Affairs is also always accepting donations and volunteers. Learn more on how you can show thanks and give back, year-round, to those whom have given us so much.

MilitaryBenefits.info has put together a listing of the 2020 Veteran’s Day Free Meals and Deals for those of our Veterans reading this post, many of them throughout the week and month of November.

To all Veterans, We thank you for your sacrifice, your bravery, and our freedom.

Hot for PEOs and Small Business

AllRisks is pushing their Self-Storage Facility Program in light of non-renewal trends related to program administrators losing their markets. AllRisks has been providing solutions for storage-related exposures including products for boat/RV storage operators, self-storage facilities and converted buildings. They have 2 exclusive Self-Storage Programs with National Capabilities. AllRisks offers over 30 National Specialty Insurance Programs ranging from Amusement Insurance to Tattoo Shops. Contact Libertate Insurance today for more information.

PIE Insurance released updates of important need to know facts about workers compensation claims fraud and how to protect your business. Types of workers’ comp insurance fraud fall into three categories:

1- Employees committing claim-related fraud by fabricating details surrounding an injury. Injury claim indicates injury happened at work in the warehouse, when it really happened on a ski trip over the weekend

2- Employers may engage in policy-related fraud by falsely reporting employees as contractors or by improper employee classification; i.e. admin desk position is reported when employee is actually a warehouse worker performing manual labor

3- Healthcare professionals can commit medical provider fraud by performing unnecessary services to collect insurance payments, fraudulent billing or partaking in kick-back programs

Workers’ comp fraud has historically cost between $6 and $7 billion dollars each year based on estimates from CAIF (Coalition Against Insurance Fraud) and the NICB (National Insurance Crime Bureau). Insurance fraud is a white-collar crime and can lead to fines and imprisonment, and increased premiums and penalties for small businesses. The Claims Journal issued an article in August of 2020, indicating that with COVID-19 the California Workers Compensation Insurance Rating Bureau is estimating annual losses in the state of $1.2 billion, extrapolated nationally approximating $5 billion. The plan to combat fraud? Data! Insurers are accessing cross-payer, multi-year claims data to identify repeat claimants, attorneys and medical providers.

How do we protect ourselves and our businesses? Educate and Document!

  • Be forthcoming about physical requirements and hazards of the job
  • Educate employees as to the proper way to lift, pull, and carry objects
  • Provide training on work-related hazards, exposure risks, and safety equipment
  • Inform employees and new hires about a zero-tolerance policy for false claims
  • Teach employees how workers’ comp works and how to correctly report injuries
  • Provide a safe way for employees to report suspicious workers’ comp activity
  • Maintain and report accurate records regarding employee roles and numbers

This is great HR information to help support businesses and mitigate risk. If you have questions or are limited in your HR resources contact Libertate Insurance today, we can help.

NAPEO released its November 2020 edition of PEO Insider, for members. Interesting Featured Articles in this month’s release include Q&A on State Legislative and Regulatory Trends, Non-COVID-19 Developments in the States, What PEOs Need to Know About the SECURE (Setting Every Community Up for Retirement Enhancement) Act, and so much more. Take a few minutes and dive into some of these interesting and useful articles. NAPEO is a great organization for all things PEO.

NAPEO also hosted an online webinar last night, for members, going over the 2020 Election and what’s next! Georgia and Washington are in recount and lawsuits have been filed in Arizona, Georgia, Michigan, Nevada as well as Pennsylvania.

Notable key dates in the upcoming months:

December 8th – states are required to settle all disputes

December 14th – Electoral College meets at state level and votes for President

January 6th – Joint Session of Congress counts electoral votes and declares a winner

January 21st – President is sworn in

If you are not currently a member of NAPEO, visit their site here and learn how to join.

Weekend in Sports

There are a ton of football events continuing this weekend with football seemingly back in full swing. South Alabama vs Louisiana, Notre Dame vs. Boston College, Miami vs. Virginia Tech, USC vs. Arizona, Florida State vs. NC State and the list continues, hope you have the opportunity to catch your favorite team. For our NFL roster Kansas City comes in the first ranking spot for week 10, they have a bye week so we won’t be able to watch them play this weekend. The next highest ranking teams are Pittsburgh and Baltimore. Pittsburgh squares off against Cincinnati 4:25pm ET catch them on FOX and Baltimore will battle New England at 8:20pm (ET) available on NBC. Find more on your favorites here at ESPN.com

Have a Great Weekend Everyone!

When Robert Hartwig Talks, People Listen…

As I was pulling this post together, for good reason, the old EF Hutton commercials we grew up with (dating myself)…

…came to mind. “When E.F. Hutton talks, people listen”…

As EF Hutton was considered (or at least advertised) as “the smartest guy in room” for all things investments; the same holds true for Robert Hartwig @Bob_Hartwig when it comes to insurance economics. He is the guy insurance company CEO’s call to help predict the future and someone I have had the pleasure to meet and see present on a few occasions. You will not see anyone provide more data and direction in a short session that is credible and meaningful.

Robert, a PHD/CPCU, was the former Chief Economist of the Insurance Institute of America and currently serves as the Clinical Associate Professor of Finance, Risk Management & Insurance @ USC’s Darla Moore School of Business. His latest presentation points to some areas that are important to understand and budget for.

https://www.uscriskcenter.com/wp-content/uploads/2020/09/Inland-Marine-UW-Association-American-Institue-of-Marine-Underwriters-9-30-2020.pdf

I have listed some of my key take-aways below and the slide number you can reference for the detail:

Slide 12 – 12.5-25% reduction in workers’ compensation premiums based on rate reductions coupled with drop in exposure basis due to COVID-19. COVID-19 Claims will not be used for rate-making purposes in most states until 2021. All other lines are seeing material drops in written premium due to usage, but rates at the same time are on the rise.

Slide 13 – Range of workers’ compensation losses on a national basis due to presumption is $.2 – $92B … quite a delta and as you will note, and a far greater one than any other line (which are also not yet understood). The range for Business Interruption losses is next with anywhere from $2B – $22B expected. The courts will be the most impactful on where this end result comes in based on policy interpretation. Policy language and intent will be the battlefronts.

Slide 15 – Cost of COVID v comparable pandemics in recent age – the cost and number of countries impacted by COVID-19 versus other pandemics (SIKA, Swine Flu, SARS etc.) is staggering and exponential.

Slide 30 – Presents the investment yield trends for 10-year US Securities which is a foundational “safe” investment for insurance carriers – down 61%. Puts more pressure on operational results which in turn, more pressure on upward pricing.

Slide 31 – 9 of the the top 10 ever point drops on the S and P ever occurred in 2020. The 3’rd largest percentage drop in history occurred on 3/16/20 at -11.98%/-324.9 points. This volatility is of grave concern to the investment strategies of the insurance carrier community. This also puts upward pressure on pricing.

Slide 41 – Business closures will cause debt of $3T for at least a generation to overcome. This is very saddening and a complex issue to make a call on. Be safe and put us in debt for another generation or open up and hope for the best? Question of the century –

Slide 47 – Rates on most lines of insurance (with the exception of Workers’ Compensation) are rising at a rapid pace. Umbrella (20%) and Directors and Officers insurance (16.8%) being hammered the hardest, with Business Interruption (9.7%), Commercial Auto (9.6%) and Employment Practices Liability insurance (9.4%) also expecting hefty increases.

Slide 50 – Business Interruption insurance will be highly litigated going forward, especially on those policies that do not have a pandemic disease exclusion. This and the presumption issue in regard to workers’ compensation are what will cause the greatest uncertainty going forward as to the exposure to the insurance community and how they react as a result the pandemic.

In conclusion, it has been a long cycle of premium reductions. Drop of exposure basis (payrolls, sales, miles travelled etc) may neutralize overall premiums to some extent, but the “as is or lower” rate renewals of the last decade will be very tough to navigate this year. Get out ahead of your renewals, especially on the specialty casualty side. Let us know if we can help.

Lifting Travel Restrictions

As the country slowly starts to reopen and travel restrictions begin to be lifted, it reminds me of how hard the travel industry has been impacted by COVID-19. Finding workers compensation coverage for this industry can be difficult due to the exposures associated with these risks. Libertate Insurance Services works closely with Beacon Aviation in placing coverage for this industry.  Beacon Aviation Insurance Services knows the ins-and-outs and provides workers compensation coverage for general aviation businesses.

Beacon’s Program offers the following:

Payment Options

  • Pay As You Owe
  • Carrier Direct Bill
  • Carrier Direct Debit
  • Credit Card

Endorsement Options

  • Foreign Voluntary Compensation
  • Voluntary Compensation
  • Waiver of Subrogation
  • Defense Base Act (DBA) Coverage
  • Employer Liability Coverage “Stop GAP”

If you need help placing your workers compensation with your travel or aviation risk, contact Jenny Bush, at jbush@libertateins.com. Click the link below for more details on Beacon’s Program.

Beacon Aviation Program Appetite

 

Report: COVID-19 Accounts for 1-in-9 California Workers’ Comp Claims in 2020

Wow — We are seeing a depletion of capacity/increased costs for health care and other “client-facing” industries.  The why —

“CWCI says that brings the total for the year to 41,861 claims, or 11.2% of all California job injury claims reported for accident year 2020. Those claims included 224 death claims, up from 160 reported as of Aug. 10.”

.005 of all claims in California are a COVID19 fatality year to date.  The unknowns are the reopens, adjusted reserves and longevity of the severe and critical patients.  Still much unknown –

September 28, 2020

The California workers’ compensation COVID-19 claim count continued to grow in August, albeit at a much slower rate than in July, with new data showing that as of Sept. 21, the state had recorded 5,130 COVID-19 claims with August injury dates, according to data compiled by the California Workers’ Compensation Institute.

CWCI says that brings the total for the year to 41,861 claims, or 11.2% of all California job injury claims reported for accident year 2020. Those claims included 224 death claims, up from 160 reported as of Aug. 10.

The latest claim count shows that the number of COVID-19 claims reported to the Division of Workers’ Compensation doubled from May to June, then increased another 16% in July. The numbers reported for August, however, fell sharply, even accounting for the lag in the reporting of COVID-19 claims, according to CWCI.

The CWCI projects there could ultimately be 8,208 COVID-19 claims with August injury dates. Given that the latest tally suggests COVID-19 claim volume may have peaked in July, CWCI is now projecting 48,086 COVID-19 claims with January through August injury dates, which is less than the January through July projection from last month.

CWCI reports that the distribution by industry shows health care workers continue to account for the largest share of California’s COVID-19 claims, filing 38.1% of the claims recorded for the first 8 months of this year, followed by public safety/government workers who accounted for 15.8%. Rounding out the top five industries based on COVID-19 claim volume were retail trade (7.6%), manufacturing (7.6%), and transportation (5.0%). In addition, the percentage of denied COVID-19 claims declined to 28.6% from CWCI’s May report of 35.5%.

Related:

NAPEO and How to Price Your Workers’ Compensation Exposure

While this year’s “Super Bowl” for NAPEO was a bit different, I was very impressed in what was put together under the shadow of the pandemic.  Great content and albeit virtually, great to catch up with folks.

My dear friend and colleague Tom Stypla did a lunch and learn on how to price client companies for workers’ compensation that is linked here…

How to Price Your Workers’ Compensation Exposure Final

Tom has priced more PEO business than anyone I know.  His understanding of PEO workers’ compensation is extremely impactful.

If we can help you with an underwriting strategy or an individual client, let us know!  321.217.7477 is my cell….

Paid Leave for Employees if School/Daycare/Summer Camps are Closed

With the new school year fast approaching and some schools electing to delay the start date, we want to make sure employers are plugged into the requirements of FFCRA. Small businesses are required by the Families First Coronavirus Response Act (FFCRA) to give employees paid leave from wok in certain circumstances relating to COVID-19. One requirement is that the child’s school/daycare/summer camp must be unavailable because of COVID-19.

The below article from FUBA helps breakdown the requirements of FFCRA.

Small businesses are required by the Families First Coronavirus Response Act (FFCRA) to give employees paid leave from work in certain circumstances relating to COVID-19. Employees who cannot work due to very specific reasons related to COVID-19 are entitled to two weeks of paid leave, with an additional 10 weeks of paid leave if they have to stay home to care for a son or daughter whose school, daycare, or summer camp is closed due to COVID-19.

If you have an employee who cannot come to work because they have to take care of a child because the child’s summer daycare – a school, camp or other program in which the employee’s child is enrolled – is closed or unavailable for a COVID-19 related reason, the employee may be entitled to paid leave.

Keep in mind that the child’s school/daycare/summer camp must be unavailable because of COVID-19. School being closed for summer vacation does not qualify an employee for paid leave because school is always closed during the summer and that closure is not related to COVID-19. If school does not reopen in the fall due to COVID-19, that may qualify employees for paid leave. However, if schools reopen but the employee’s children are attending online or digitally, the employee may not qualify for paid leave.

If an employee requests paid leave, you should get the following:

  1. The employee’s name and the dates the leave is requested
  2. A statement of the COVID-19 related reason the employee is requesting leave
  3. A statement that the employee is unable to work or telework for this reason
  4. Documentation supporting the reason for leave

The employee also needs to give you the name and age of the child they will be taking care of, the name of the daycare/summer camp that has closed, and they must provide a statement that no one else will be caring for the child while the employee is on paid leave. If the child is older than 14, the employee must show that special circumstances require them to stay home with the child during daylight hours.

Employees taking paid leave because their child’s daycare/summer camp is closed due to COVID-19 must be paid two-thirds their regular rate of pay, up to $200 per day. Learn more about calculating pay here.

You can offset the cost of their leave by keeping a portion of the quarterly federal employment taxes you would otherwise deposit with the IRS. If the cost of the leave is more than your federal employment tax bill, you can request an advance refund from the IRS using form 7200. To claim a payroll tax credit, you must retain the documentation described above and comply with any IRS procedures for claiming the tax credit. For more information about how to claim these payroll tax credits and what documentation is required, click here. For more information about form 7200, click here.

Click here to learn about other reasons that entitle employees to paid leave.

______________________________________________________________________

This article was written by FUBA Workers’ Comp

Paid Leave Concerns When Employees Get COVID-19 Twice – Law360.com

https://www.law360.com/articles/1291176

Law360 (July 15, 2020, 4:21 PM EDT) —

Mark Konkel
Mark Konkel
Maria Biaggi
Maria Biaggi
Nicholas Kromka
Nicholas Kromka

The coronavirus has been novel in more ways than one. On one end of the spectrum, employers confront new questions of almost philosophical dimensions.

How much risk is too much risk? What risks should we ask our employees to accept? Where is the line between ordinary risk — the kind that employees undertake when they walk out the door every day to go to work — and the extraordinary risks posed by a pandemic from which, in the end, employers cannot entirely shield their workforces?

A seemingly more mundane novelty is the plethora of new COVID-19 laws and regulations. Compliance should just be a matter of reading a statute and, well, complying. But even there, an evolving real-world pandemic potentially makes compliance just as complicated.

One example we have helped our clients wrestle with involves exactly this kind of straightforward-on-paper, tricky-in-practice complexity.

One requirement of the Families First Coronavirus Response Act appears to be simple: When an employee working for an employer with under 500 employees gets sick with COVID-19, is seeking a COVID-19 diagnosis, or is subject to a quarantine order of a doctor or a government, they are entitled to up to 80 hours of emergency paid sick leave.

And that made perfect sense when the law was hurriedly drafted: You get sick once, and you do not get sick again, right?

Wrong. Mounting evidence now shows that contracting COVID-19 does not confer absolute immunity and that many individuals have now contracted the novel coronavirus more than once. So what happens when an employee exhausts his or her 80-hour emergency paid sick leave entitlement, recovers from COVID-19, and then contracts it again?

What are the basic requirements of the FFCRA?

Under the FFCRA, full-time and part-time employees who are unable to work or telework due to one of the qualifying reasons below may take up to 80 hours of paid sick leave.

  • The employee is subject to a federal, state or local quarantine or isolation order related to COVID–19.
  • The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19.
  • The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
  • The employee is caring for an individual who is subject to the first or second reason above.
  • The employee is caring for his or her child if the school or place of care of the child has been closed, or the child care provider of such child is unavailable, due to COVID–19 precautions.
  • The employee is experiencing any other substantially similar condition specified by the secretary of the U.S. Department of Health and Human Services in consultation with the secretary of the U.S. Department of the Treasury and the secretary of the U.S. Department of Labor.

An employee who contracts COVID-19 may be eligible to take 80 hours of emergency paid sick leave for one or more of the above-qualifying reasons. However, they may only take 80 hours of paid sick leave once.

That is, the language of the FFCRA is arguably quite clear that two weeks of emergency paid sick leave is all an employee is entitled to within one Family and Medical Leave Act period, i.e., 12 months, whether a calendar year, another fixed 12-month leave year, etc.

The new legislation, effective April 1 to Dec. 31, was quickly drafted in March when the coronavirus was still novel. But while there is still so much that is unknown about COVID-19, we can no longer assume that an individual who has been infected with COVID-19 and recovers, will not be able to get the virus again.

In the U.S., people are reporting testing positive for the virus after having recovered from an initial infection.[1] According to the Centers for Disease Control and Prevention:

When a positive test occurs less than about 6 weeks after the person met criteria for discontinuation of isolation, it can be difficult to determine if the positive test represents a new infection or a persistently positive test associated with the previous infection. If the positive test occurs more than 6-8 weeks after the person has completed their most recent isolation, clinicians and public health authorities should consider the possibility of reinfection.[2]

And, of course, persons who are determined to be potentially infectious should undergo evaluation and remain isolated.

In April, the DOL issued guidance which also confirms the plain language of the FFCRA’s FMLA Expansion Act. That is, employees are not entitled to any more than 12 weeks of FMLA leave in a 12-month period, regardless of whether an employee takes paid leave under the FMLA Expansion Act or regular unpaid FMLA leave for reasons unrelated to COVID-19.

The FMLA Expansion Act does not add additional job-protected leave time. Rather, it adds additional qualifying reasons to take leave. Thus, an employee who takes 12 weeks of FMLA leave, does not have an additional 12 weeks of leave under the act because he or she is, for example, experiencing symptoms of COVID–19 for a second time and seeking another medical diagnosis.

Moreover, employees who may have taken FMLA leave for reasons other than the public health emergency in the preceding leave year may have reduced leave time under the FMLA for purposes of the public health emergency. This may have the unfortunate effect of potentially leaving those who are most vulnerable with less leave time than employees who have not needed to use regular unpaid FMLA leave for their own serious health condition. Also, the FFCRA only applies to employers with 500 or fewer employees.

New York employers are required to comply with both the FFCRA and the New York Emergency Paid Sick Leave Law, or EPSL. The benefits available under the EPSL vary based on the size and net income of the employer.

Under the EPSL, private employers with 100 or more employees are required to provide their employees with at least 14 days of paid sick leave. Employees in New York are eligible for benefits under the EPSL when the benefits provided by that law are in excess of those provided under the FFCRA.

In this situation, employees would be entitled to federal benefits, plus the difference in benefits provided under the FFCRA and the EPSL. In other words, no double dipping. And, unless the employee has to care for a family member with a serious health condition, he or she would not be entitled to New York paid family leave.

Given all this, there is no statutory obligation under the FFCRA to provide employees with additional paid leave in the unfortunate circumstance that an employee contracts the virus twice. However, this may not always be the answer under state law.

For example, the New York State Department of Health and New York State Department of Labor recently issued guidance providing that health care employees who test positive after a quarantine or isolation may receive paid sick leave for up to two additional periods of quarantine or isolation.

Employers could certainly opt to pay employees during a second quarantine, but they are not required to under the current federal law. Alternatively, employers could provide unpaid time off, if the employee has exhausted his or her paid time off.

An employer may also be obligated to consider leave as a reasonable accommodation for individuals whose disabilities put them at greater risk from COVID-19, unless such an accommodation would cause an undue hardship on the employer.

So that ends the inquiry, right? Again: wrong.

What’s an employer to do?

We are always wary of simple answers to tricky questions. One answer to the questions posed above is deceptively simple: If an employee has exhausted her 80 hours of FFCRA leave, it is exhausted, and she is not entitled to a second round of leave.

While that position is straightforward and legally defensible, it misses a bigger context. If an employee is not entitled to additional leave but has contracted COVID-19 twice (or more), a sensible employer, or at least, one that is interested in avoiding getting sued by other employees, will not allow the sick employee to return to work. But if an employer takes the position that an employee ordered to stay home is not entitled to pay, it opens up a whole other can of worms.

One policy arguably underlying the pay protection provisions of the FFCRA is to encourage candor: Employees will be less likely to ignore or minimize their own symptoms, and to tell their employers about what is going on, if they are not concerned about losing compensation as a reward for their honesty.

And with federal unemployment benefits of $600 per week in addition to the normal level of benefits still in place, an employee may well consider continuing to stay home or eventually finding another job.

These concerns underscore why many larger employers who are not subject to the FFCRA’s coverage because of their size have gratuitously offered pay protection to sick employees: You want to know that employees are sick, tell them to stay home to avoid community spread in the workplace, and — perhaps most importantly to your longer-term business goals — actually retain a workforce you hope can return soon enough in full force.

Obviously, employers must first and foremost ensure compliance with applicable law, including the FFCRA. But navigating the pandemic is not just a question of strict compliance. Arguably, protecting continuity of operations, the health of the workforce and an employer’s long-term investment in its workforce is at least as important as ensuring any shorter-term compliance.

While this article cannot address how a specific employer will weigh those potentially competing concerns, smart employers consider all of those impacts in deciding whether or not to maintain a leave policy that may exceed, not just meet, the requirements of the FFCRA.

Regardless of whether the U.S. is in the first or second wave, the possibility is now evident that employees may get the coronavirus for a second time, while having already exhausted the leave entitlements under the FFCRA, state leave laws and the employer’s PTO policy. Employers should be prepared to face this new obstacle, particularly as cases in the U.S. are not abating.


Mark A. Konkel is a partner and co-chair of the labor and employment practice group at Kelley Drye & Warren LLP.

Maria B. Biaggi is an associate at the firm.

Nicholas J. Kromka is an associate at the firm.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

The New Normal….Pandemic Insurance Products

It was only a matter of time before insurers began to develop products to cover pandemics.  The products range from traffic monitor apps that pay insureds based on a minimum threshold to relapse coverage that protects businesses forced to shut down a second time.  The complete article from Reuters is below.

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Insurers are creating products for a world where virus outbreaks could become the new normal after many businesses were left out in the cold during the COVID-19 crisis.

While new pandemic-proof policies might not be cheap, they offer businesses from restaurants to film production companies to e-commerce retailers ways of insuring against disruptions and losses if another virus strikes.

The providers include big insurers and brokers adding new products to existing coverage, as well as niche players that see an opportunity in filling the void left by mainstream firms that categorize virus outbreaks like wars or nuclear explosions.

Tech firm Machine Cover, for example, aims to offer policies next year that would give relief during lockdowns. Using apps and other data sources, the Boston-based company measures traffic levels around businesses such as restaurants, department stores, hairdressers and car dealers.

If traffic drops below a certain level, it pays out, whatever the reason.

“This is the type of coverage which … businesses thought they had paid for when they bought their current business interruption policies before the coronavirus pandemic,” the company’s founder Inder-Jeet Gujral told Reuters.

“I believe this will be a major opportunity because post-COVID, it would be as irresponsible to not buy insurance against pandemics as it would be to not buy insurance against fire.”

The company is backed by insurer Hiscox and individual investors, mostly from the insurance and private equity world.

Restaurants in Florida’s Miami-Dade County, where Mayor Carlos Gimenez on Monday ordered dining to shut down soon after reopening, are now reeling, said Andrew Giambarba, a broker for Insurance Office of America in Doral, Florida.

“It’s been like they made it to the ninth round of the fight and were holding on when this punch came out of nowhere,” said Giambarba, whose clients include restaurants that did not get payouts under their business interruption coverage.

“Every niche that is dealing with insurance that is affected by business interruption needs every new product they can have.”

Filling the Void

Pandemic exemptions have helped some insurers emerge relatively unscathed and the sector has largely resisted pressure to provide more virus cover. Indeed, some insurers that paid out for event cancellations and other losses have removed pandemics from their coverage.

British risk managers association Airmic said last week that the pandemic had contributed to a lack of adequate insurance at an affordable price and most of its members were looking at other ways to reduce risk.

To help fill the void in a locked-down world, Lloyd’s of London insurer Beazley Plc, started selling a contingency policy last month to insure organizers of streamed music, cultural and business events against technical glitches.

“These events are completely reliant on the technology working and a failure can be financially crippling,” said Mark Symons, contingency underwriter at Beazley.

Marsh, the world’s biggest insurance broker, has teamed up with AXA XL, part of France’s AXA, and data firm Arity, which is part of Allstate, to help businesses such as U.S. supermarket chains, restaurants and e-commerce retailers cope with the challenges of social distancing.

With home deliveries surging, firms have hired individual drivers to meet demand, but commercial auto liability insurance for “gig” contractors with their own vehicles is hard to find.

Marsh and its partners devised a policy based on usage with a price-by-mile insurance, which can be cheaper than typical commercial auto cover as delivering a pizza doesn’t have the same risks as driving people around.

“Even when the pandemic is over, we believe last-mile delivery will continue to grow,” said Robert Bauer, head of Marsh’s U.S. sharing economy and mobility practice.

A report by consultants Capgemini showed that demand for usage-based insurance has skyrocketed since COVID-19 first broke out and more than 50% of the customers it surveyed wanted it.

However, only half of the insurers interviewed by Capgemini for its World Insurance Report said they offered it.

Bespoke Cover

Since businesses are only now learning how outbreaks can affect them, some new products are effectively custom-made.

Elite Risk Insurance in Newport Beach, California, has been offering “COVID outbreak relapse coverage” since May for businesses forced to shut down a second time, its founder Jeff Kleid said.

The policies are crafted around specific businesses and only pay out when certain conditions are met, Kleid said.

For film and television production companies that could be when a cast member contracts the virus, forcing them to stop shooting. Another client, which raises livestock for restaurants, is covered for a scenario in which it would be impossible to get animal feed.

Such policies do not come cheap. A $1 million policy could cost between about $80,000 to $100,000 depending on the terms.

“The insurance … is costly because it covers a risk that does not have a historical basis for calculating the price,” Kleid says.

And in March, when COVID-19 ravaged northern Italy, Generali’s Europ Assistance offered medical help, financial support and teleconsultations for sufferers when discharged from hospital, on top of regular health insurance.

It sold 1.5 million policies in just two weeks and now has 3 million customers in Europe and United States.

Some insurers are also working on changes to employee compensation and health insurance schemes. With millions of workers not expected to return to offices anytime soon, some large insurers in Asia are preparing coverage to account for that, according to people familiar with those efforts.

At least one Japanese insurer has started work on a product to cover employees for injury while working at home, they said.

“Working from home will be the new normal for years to come. That would make the scope of the employee compensation scheme meaningless if a person suffers an injury while at home,” said a Hong Kong-based senior executive at a European insurer.

(Reporting by Noor Zainab Hussain in Bengaluru, Suzanne Barlyn in Washington Crossing, Pennsylvania, Carolyn Cohn in London and Sumeet Chatterjee in Hong Kong; additional reporting by Muvija M; Editing by Tomasz Janowski and David Clarke)

https://www.insurancejournal.com/news/international/2020/07/10/575081.htm