COVID-19 and commercial insurance: questions and answers

IBC members are committed to accompany and support commercial customers during the COVID-19 crisis, as announced in a media release. Here are, in the form of a brief Q&A, explanations for the most common questions related to commercial insurance and the COVID-19 pandemic.

Please note that commercial insurance is complex and specialized, which makes it important that you speak to your insurance representative if you have any questions or need clarification about your coverage.

1. Will I be covered by a standard business insurance policy, or my business interruption insurance policy, if my business activities are interrupted because of COVID-19?

As a general rule, business insurance policies and traditional business interruption insurance policies do not cover business interruptions or supply chain disruptions caused by a pandemic such as COVID-19.

Business insurance is a complex and specialized field: your policies are specific to your business. It is important to talk to your insurance representative if you have questions or need more detailed information about your coverage.

2. How does business interruption insurance work?

There is no one-size-fits-all in business insurance. Policies take many different forms.

In most cases, it is necessary to prove that insured premises have suffered material damage of a type covered by your property insurance policy – this might include damage caused by fire, heat, flooding, or fire-fighting measures. In addition, the business interruption and loss of business revenue must be caused by this material damage.

3. To deal with the crisis, I’ve changed some of my business activities. Should I notify my insurance company?

Yes. It’s important to talk to your broker or insurer so that they can assess the situation and make sure you have the right coverage for your new activities.

4. Will insurance companies renew policies as they usually do?

Policy renewal will be carried out. A number of insurers have announced measures to make the process less cumbersome. Renewal is a good time to review your policy and make sure it reflects your current situation.

5. My premium is based on business volume. Will it be adjusted, given that I’ve had to reduce or cease my activities?

It’s a good idea to talk to your broker or insurer to discuss your situation and see if adjustments can be made.

6. I have a fleet of parked vehicles that are no longer going anywhere. Should I cancel my insurance policy?

No. But you should talk to your broker or insurer to discuss the possibility of making adjustments to your contract.

Don’t forget that automobile insurance is mandatory; but without keeping full coverage, you might be able to make adjustments to your contract.

7. My business is closed, and will remain closed for over 30 days. Is my contract still in force?

Because the situation is exceptional, insurers have come up with a variety of responses and commitments. You will need to contact your insurance company to find out what its policies are.

Updated April 16, 2020