The Commercial General Liability Insurance Policy and Coronavirus Coverage
The world is grappling with the Corona crisis. This global pandemic has not only caused havoc in the world economy but has also injected unprecedented fear among people. Quite naturally, the ongoing pandemic has raised obvious questions related to COVID 19. Thankfully, all have been focused on Worker’s Compensation and business interruptions policies. Many organizations and establishments, especially those long-term facilities, were caught off guard by the unexpected announcement of lockdown. Many are still clueless as to how to deal with the loss of lives and business. In such situations, companies will undoubtedly look to their Commercial General Liability Insurance policy for coverage, including the cost of defense.
The CGL is a standard policy that provides businesses with protection against injury, loss, or damage. It comes with three essential categories – Coverage A, Coverage B, and Coverage C. Coverage A protect against the claim for bodily injury or property damage. Coverage B pays for personal or advertising injury. Medical payments are covered in Coverage C. When it comes to property damage, it primarily refers to “physical injury to tangible property, including all resulting loss of use of that property. “Body injury,” on the other hand, refers to “injury, sickness or disease sustained by a person, including death.”
Remember, you are eligible to make claim property damage or bodily injury only if they occur during the policy period. It’s up to you to prove that your claim is legitimate as it falls within the terms of the coverage period of the insurance policy. As for bodily injury claims, there’s hardly any confusion as to when the injury arose as the courts usually consider the date of the first treatment as the first manifestation of the bodily injury.
Many CGL policies come up with “mold exclusion,” which is a pretty common term for construction professionals. While it’s called “mold,” the actual exclusion also covers both fungi and bacteria. The general insurance does not pay for bodily injury that occurs due to exposure to any bacteria on or within a building or structure.
Nonetheless, COVID-19 is a virus and not a bacteria or fungi. The courts of North Carolina strictly announced exclusion, asking the policyholder to prove their applications. There is also a standard exclusion for pollution exposure, but the courts generally consider pollution exposure as chemical contamination. There’s also an endorsement available, but rarely used, that specifically shuns liability for infectious diseases. Luckily, it would seem that none of the usual exclusions apply to COVID 19 related bodily insurance claims.
Next, it’s to be determined if the “bodily injury” was caused by an occurrence. According to CGL policies, “occurrence” can refer to “accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Significantly, the lack of definition of the term “accident” has led to substantial litigation across multiple jurisdictions that seek to define “accident” in the insurance coverage context. The outcomes of these cases do vary by state.
According to the Supreme Court of NY, “accident” can be defined as an unforeseen event, occurring without the will or design of the person whose mere act causes it. It could also be an unexpected or undersigned occurrence.
While the Supreme Court of NY construes infectious disease as an “accident,” an epidemic such as COVID-19 should probably be considered as “an unforeseen event” or “unusual” or “unprecedented.” Thus, it could typically be included under Coverage A of the CGL.
Coverage B, which essentially pays for personal and advertising injury, does not cover any occurrence. It only covers things like false arrest, detention, or imprisonment, wrongful eviction, libel, slander, or disparagement of goods and services, etc. As for COVID-19, there would be a basis for coverage under Coverage B in case false or wrongful detention or imprisonment arises from a claim of wrongful quarantine.
Coverage C might become relevant for payment of third-party medical expenses. It pays for all necessary and reasonable medical, surgical, ambulance, hospital, professional nursing, and funeral expenses for a person injured or killed in an accident on the insured’s premises or arising from business operations.
The premium for CGL is calculated on a few different factors but primarily based on the type of business you are in, your expected annual revenues for the upcoming 12 months and sometimes, the amount of your annual payroll.
The premium for CGL is determined on a few different factors, but primarily calculated on the type of business you are in, your expected annual revenues for the upcoming 12 months and sometimes, the amount of the annual payroll.
If you are looking for a commercial general liability insurance policy, you are advised to work with a reputable insurance agency that knows just what to do. Moreover, they will critically review any policies to discover what coverage addresses the effects of COVID-19 on business as well as individuals. The commercial insurance brokers New York will represent several different companies and can shop the coverage request internally to get the best deal for you. No matter how simple or complicated your business is, independent agents are more flexible and can find coverage for all. They are knowledgeable and courteous and know what to do.
Author Bio: Robert James is an accomplished writer with years of experience writing on various topics. His recent write up focuses on Commercial General Liability Insurance Policy and Coronavirus Coverage.