Coronavirus and Your Insurance Program

Read, Communicate … and Wash your Hands

By Bob Middleton

When the Centers for Disease Control (CDC) announced recently that the spread of the Coronavirus, or to be more specific COVID-19, was going to be inevitable in the United States, the anxiety level in the performing arts community has hit an all-time high. I remember the Dance/USA meeting in New York City during the winter of 2008 being populated with a lot of white knuckled attendees in the midst of a flu outbreak, but this has a more immediate and ominous feel.

Below is an outline of the insurance areas and coverages that might be of interest to most dance companies in light of the developing pandemic.

BUSINESS INTERRUPTION AND PROPERTY COVERAGE

You have to jump through two hoops to have your property policy respond to a virus claim. First, your policy does not have an exclusion for Virus or Communicable diseases. Second, the trigger for coverage is not physical damage, whether that is fire, flood, smoke, etc. Most policies have one or both, even if they are “entertainment focused.” Business income, and the effect an outbreak might have on it, is the issue of concern for most performing arts groups, so this is usually not the hoped-for answer.

I have started to see situations where performers are not interested in continuing tours that are going to areas with concentrations of COVID-19. Whether domestic or international tours, strikes are excluded from most coverage. Policies differ in wording and enhancements, so coverage for Civil Authority might be broader, such as in a case where a state or municipality shuts down productions on a wide basis.

GENERAL LIABILITY

Your liability policy provides coverage against third-party claims for bodily injury or property damage. Although these policies should provide legal representation in the event of a claim, some have a communicable disease exclusion. Most policies also exclude expected or intended injury, which might become an issue as claims occur, if a company proceeds with operations or performances during the COVID-19 crisis.

WORKERS’ COMPENSATION AND EMPLOYER’S LIABILITY

The issues that have arisen, thus far, for workers’ compensation have been on an international basis. If a company goes on tour and employees become ill, would the COVID-19 be treated as a covered illness? Fortunately, most insurance carriers have responded by covering it as an “endemic disease.” This would not only include medical treatment, but repatriation, which would be needed for extensive medical intervention. An employee who feels their employer has been negligent in causing their exposure to COVID-19 would develop a claim under the employer’s liability policy.

EVENT CANCELLATION

There is no way to obtain an event policy currently without a COVID-19 exclusion or communicable disease clause.

DIRECTORS AND OFFICERS

These policies have an exclusion for bodily injury, so claims from board members or officers brought under the virus would be excluded.

As we see claims occur, it will become evident how insurance carriers plan on responding to certain types of claims, especially business income losses due to municipal or state-wide shut downs. It is extremely important that you read your insurance policies now and discuss these issues with your insurance agent. Business Income claims are never easy to adjust, but it helps to have an idea of what your coverage will or will not cover before you file a claim. This will allow you to develop or refine your organization’s risk management plan accordingly, using your insurance coverage as an important part of that plan.

Finally, please wash your hands for 20 seconds.

Note: For further resources and information on Coronavirus, see Dance/USA’s webpage. 

Bob Middleton is the owner/director of the Arts Insurance Program, which is affiliated with Maury Donnelly and Parr, Inc. The Arts Insurance Program is the largest insurer of dance and ballet companies and works with more than 2,000 performing artists nationally. Bob is a frequent guest speaker on insurance issues for the performing arts community and has been an agent for more than 30 years. He received a BA from the College of William and Mary and attended the USF&G School of Insurance. Bob was recently listed by Insurance Business America as one of the top 100 brokers nationally for 2016, 2018, 2019 and 2020. He lives with his wife, three kids and two dogs in Baltimore. He does not golf.