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COVID-19 Updates from Chadwick Brokerage LLC


PLEASE NOTE THAT CHADWICK BROKERAGE IS NEITHER ENCOURAGING NOR DISCOURAGING OUR CLIENTS OR INSUREDS TO FILE CLAIMS. THE BELOW INFORMATION RELFECTS OUR OPINIONS BASED ON INFORMATION AVAILABLE TO US AT THE TIME OF PUBLICATION. ONLY AN INSURER CAN MAKE A DETERMINATION OF COVERAGE, SO IF YOU BELIEVE YOU MAY HAVE COVERAGE AND WOULD LIKE TO FILE A CLAIM PLEASE CONTACT US AND WE WILL ASSIST YOU IN DOING SO.



March 31, 2020

Insurers confirm they will comply with NY order to allow deferment of premium payments and cancellations, many will extend accomodation to all States.

Chadwick Brokerage has contacted nearly 2 dozen insurers regarding their positions on recent instructions from several state governments and insurance departments to provide extended grace periods for premium payments and cease cancelling or non-renewing policies for payment-related issues. As the insurers respond we will make this information available on this page.




March 30, 2020

The New York State Department of Financial Services (DFS) orders insurers and premium finance companies to allow deferment of premium payments for 60 days and other relief measures to small buisnessnes facing financial hardship.

From DFS:

"Property and Casualty Insurance

Today’s emergency regulation also directs property and casualty insurers to provide flexibility to consumers experiencing financial hardship caused by the pandemic by extending to 60 days the grace period for the payment of premiums and fees under auto, homeowners and renters insurance policies, among others. The same relief will be available for businesses with 100 employees or less, independently owned and operated and resident in New York, under auto, homeowners, renters, workers’ compensation, medical malpractice, livery and taxi, and certain other lines of commercial insurance.

DFS requires property and casualty insurers to provide the following relief to consumers and small businesses who can demonstrate financial hardship due to COVID-19:
  • Provide a 60-day grace period for the cancellation, conditional renewal or non-renewal of a policyholder’s insurance policy;
  • Allow premiums due but not paid during the 60-day period to be paid over the course of the following year in 12 equal monthly installments; and
  • Waive any late payment fees, and not report late payments to credit rating agencies, during the 60-day period.
Premium Finance Agencies

The emergency regulation also requires premium finance agencies to provide the same relief to those consumers and businesses who have financed the payments of their premiums, subject to safety and soundness considerations of the premium finance agencies.

DFS requires premium finance agencies to provide the following relief to consumers and businesses who can demonstrate financial hardship due to COVID-19:
  • Provide a 90-day grace period (for life insurance policies) and a 60-day grace period (for property and casualty policies) for the payment of installment payments under the premium financing agreement;
  • Allow installment payments due but not paid during the applicable grace period to be paid over the course of the following year in 12 equal monthly installments; and
  • Waive any late payment fees, and not report late payments to credit rating agencies, during the applicable grace period."
Read the full press release here.






March 25, 2020

Some helpful information for Connecticut-based firms.
Below are links to CT.gov's resources for business owners, information and recommendations from the CT Insurance Department specifically relating to business interruption coverage, and a comprehensive list of FAQs from the Governor's Office:

https://portal.ct.gov/Coronavirus/Information-For/Business-Resources

https://portal.ct.gov/-/media/CID/COVID-19/Covinavirus-BusinessInterruptionFAQs.pdf

https://portal.ct.gov/-/media/Coronavirus/COVID-19-FAQs.pdf



March 24, 2020

Regarding NY State Statutory Disability/Paid Family Leave (DBL/PFL.
By the order of Gov. Andrew Cuomo, if an employee is under an order of mandatory or precautionary quarantine or isolation issued by the state of New York, the department of Health, local board of health, or any government entity duly authorized to issue such order due to COVID-19, PFL and/or disability benefits may be available to them. As such, updated PFL/Disability forms have been made available which will allow covered employees for filing of claims themselves, if quarantined, and/or if they need to care for quarantined child(ren).

Below are links to Employee and Employer Notices which provide a basic summary of what Employers and Employees need to know about COVID_19 Paid Sick Leave and instructions for requesting DBL and PFL benefits due to quarantine of oneself or a child:

What Employers Need To Know About COVID-19 Paid Sick Leave

What Employees Need To Know About COVID-19 Paid Sick Leave

Instructions for taking Disability and/or Paid Family Leave for yourself due to COVID-19 Quarantine/Isolation

Instructions for taking Paid Family Leave for a Minor Dependent Child due to COVID-19 Quarantine/Isolation



For more information please visit: https://www.governor.ny.gov/programs/paid-sick-leave-covid-19-impacted-new-yorkers



March 18, 2020

As the situation concerning the novel Coronavirus continues to change hourly, we want to ensure our clients and friends that Chadwick Brokerage remains operational. Our entire staff has the ability to work remotely and we will continue to service your needs regardless of the severity or duration of the epidemic. Over the past few days, we have received many phone and email inquiries concerning possible insurance coverage relating to the Coronavirus. Although the ultimate impact of the pandemic and how various types of insurance policies will respond are currently unknown, here is what we believe at this time:

Business Interruption / Extra Expense (BIEE): This coverage is part of the standard businessowners/package policy and protects a business from economic losses resulting from a company's inability to put insured property damaged by a covered cause of loss to its normal, intended use. Considering that the Coronavirus has not caused property damage, there most-likely would be no coverage available. Businessowners policies also include "civil authority" coverage, which applies when an insured is unable to access its property due to government order as a result of physical damage to adjacent or nearby property, but again, illness or the threat of illness due to a virus doesn't qualify as property damage and therefore would not trigger this coverage.

Additionally, following the SARS outbreak in 2003, the insurance industry took specific actions to limit coverage for the next pandemic. The Insurance Services Office crafted Form CP 01 40 07 06 - Exclusion for Loss Due to Virus or Bacteria. Once state regulators approved of the language, the exclusion was quickly adopted by most commercial insurance providers. The exclusion provides, in relevant part that the insurer "will not pay for loss or damage caused by or resulting from any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease." The exclusion goes on to specifically state that it applies, among other things, to "business income," i.e., business interruption.

As mentioned earlier, this situation is changing by the minute and as of 11 am on 3/16/2020, the New Jersey Legislature was discussing a draft of Bill A-3844, a measure to force insurers to pay business interruption claims expressly excluded by the ISO Virus Exclusion. The article can be found here:

New Jersey Legislature Considering Bill To Force Insurers To Pay COVID-19 Business Interruption Claims Expressly Excluded By ISO's "Virus" Exclusion

Update: As of Tuesday 3/17, New York appears to be considering similar legislation.

Workers Compensation: Because the Coronavirus has not been determined to be an occupational disease, there likely would be no coverage available under this policy. "Occupational" is commonly defined as arising out of or in the scope of employment and or caused by conditions particular to your work - a definition which illness caused by a virus wouldn't seem to fit. However, this determination is subject to individual states' laws and the rulings of their respective workers compensation boards, so this could change and evolve over time.

Employers Liability: This is "Part 2" of a typical workers compensation policy which provides protection to the employer in the event an injured employee, or a 3rd party like a spouse, claims additional damages arising from things not covered by workers compensation and sues the employer directly. Unlike workers compensation benefits, it is up to a civil court to determine liability and award damages, and policies typically have broad language which require the injury/disease only be "caused or aggravated by" the conditions of employment. Therefore, it is possible that an employee could claim (regardless of merit) that their employer caused or contributed to their getting sick by negligently failing to provide a safe work environment, insisting employees come to work when it was unsafe to do so, etc.

Although normally uncommon, we may see a surge in these types of claims if state boards roundly deny workers compensation and/or disability benefits to persons who contract Coronavirus, or are prevented from working due to exposure or threatened exposure, as an employers liability claim may be one of the few avenues of recourse available to an employee facing financial hardship. Due to this potential threat, employers should refrain from taking chances with the safety of their employees and should not ask or in any way encourage employees to disobey instructions of authorities pertaining to self-quarantining, curfews, travel, or assembling in large groups for work-related purposes because doing so could result in liability.

NYS Disability / Paid Family Leave: Based on our understanding of the NY Disability Benefits Law, a preventative quarantine would not constitute a disability event and therefore, would likely not be a covered claim under a DBL/PFL policy. This is due to "disability" being defined as the inability of an employee (following the applicable waiting period), as a result of an off-the-job injury or illness, to perform the regular duties of his/her employment. However, if you have symptoms and have tested positive for the coronavirus, you may be eligible for short-term disability coverage (contingent upon the determination of an attending physician).

Family and medical leave insurance laws vary by state as well. Some call for employers to compensate workers for at least some time during public health emergencies. What benefits someone is entitled to will also likely depend on whether they've been quarantined because they are actually sick with COVID-19 or if they are sidelined as a precautionary measure because of being exposed to someone who is sick.


Summary: As the coronavirus works its way around the world and its effects ripple through the insurance industry, policy language will be tested, and contested, and it is likely that governments - both state and national - will explore options to help offset the financial and social costs of this virus. Their actions may provide or expand coverages that were otherwise unavailable or limited, so even if your current insurance policies do not appear to contain coverage for disease-related losses, we still recommend the following:

- Record any infections/contamination that impact your specific properties, or those of your suppliers or customers

- Make sure that employees are aware of any workers compensation and disability policies your company might carry. Keep in mind that even if these policies do not presently provide coverage, as an employer, you may not actively discourage employees from seeking benefits.

- Record any impact on your firm's operations, loss of revenue, or extra expenses incurred in your efforts to minimize the effects of the virus on your business.



The health and well-being of our families, clients, and friends remain our top priority. We will continue to provide uninterrupted service to you and hope that everyone remains healthy and safe. Please revisit this page periodically for updates.

Sincerely,

Rich, Eli, Keith, and Kendra


New Jersey

350 Main Street, Bldg 2, Ste. 3
Bedminster, NJ 07921
Telephone: (908) 766-6570


New York

1441 Broadway, 6th Floor
New York, NY 10018
Telephone: (212) 388-1469


Connecticut

212 River Road
Killingworth, CT 06419
Telephone: (203) 220-2222
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