During times of change and vulnerability insurance remains essential to business operations and continuity. Whether the cover applies to your business assets, employees, clients and customers or members of the general public you service, you need to ensure you have the four core business insurances that can provide added protection during uncertain times.
For businesses assessing cash flow and other continuity issues, considerations may include reducing policy limits, adjusting the breadth or scope of cover, or cancelling insurance.
Here we look at four essential business insurance policies that are especially applicable to medium sized companies (<$250m turnover, 20+ employees), summarised from the recently released Gallagher Middle Market Insurance Update.
Management liability insurance
This insurance cover addresses the various risks of managing a business, protecting your company and its directors and officers against legal liabilities and failing to meet statutory obligations.
Actions can be brought against a company, its directors, officers and employees by a number of parties including: regulators, employees, competitors, creditors, shareholders, clients and liquidators.
Provisions under management liability include
Directors and officers’ liability (D&O) provides cover for costs associated with defending directors, managers and employees against claims arising from their actions and decisions. Claims and investigations may be brought by competitors, suppliers or customers or regulatory bodies.
Employment practices liability (EPL) covers employee related claims
Statutory fines relating to unintentional breaches of workplace health and safety laws
Employee crime: fraudulent activity, money and property theft.
Business premises that are closed down or partially trading (e.g. a restaurant offering takeaway or delivery services) are still exposed to risks that may be covered by public liability insurance, such as injuries occurring in your car park. With changes in business operations you need to ensure your business is protected at all times.
If your premises have been exposed to COVID-19 contamination you should undertake deep cleaning and sanitisation by an accredited service provider, which may be included under your property insurance cover.
Review your public liability insurance alongside broader business interruption and property insurance cover for comprehensive coverage of your risk exposures.
Property damage and business interruption
Industrial special risk (ISR), business pack and commercial pack policies provide cover for damage to assets owned by your business. The business interruption (BI) section of these policies covers includes loss of profits, revenue or rentals and/ or increased expenses caused by damage to insured property, as well as contingent damage to property at the premises of suppliers, customers and utilities. Damage caused by pandemics or other communicable diseases is a stated exclusion on standard policy wordings.
Cover may be subject to sub-limits which restrict the amount recoverable to a lower sum than the limit of the overall policy. Business interruption, for example, may stipulate a minimum period of the disruption before a claim can be initiated.
In the event of your premises being damaged by a storm, fire or civil unrest, business interruption cover generally covers the loss of gross profit and increased cost of working, but you should review the terms and conditions that apply to your insurance.
Workplace health and safety
Business owners and employers are faced with evolving risks as their employees work remotely. The return to workplace transition needs to be managed in a way that ensures your workforce has access to a healthy and safe working environment to avoid potential workers’ compensation claims arising from COVID-19.
involving employees in assessing requirements
identifying risks and implementing measures to address them
executives, managers and employees working together to adapt and promote covid-19 safe work practices
ensuring the workplace is ready for the social distancing and hygiene measures
promoting and embedding safe practices
being ready to respond to cases of COVID-19 in the workplace.
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient’s industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers’ control.
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