Updated October 29, 2021

COVID-19 continues to drastically affect our day to day lives, as individuals, as families, as employees, as citizens. If you are a business owner, you are likely facing one of the most challenging circumstances you have ever seen in the life of your business.

In part one of this post, we looked at home and auto insurance and how they have been affected, from relief programs to changes in circumstances. In this part two, we are specifically going to look at business insurance and what business owners needs to know during the pandemic.

It’s important to note off the bat that commercial insurance is quite complicated and that there are as many different policies as there are types of business. We will give some general guidelines and things to think about in this post, but the best thing to do would be to contact your broker or provider to discuss your specific situation with them. Let’s look at some considerations for business insurance during a pandemic…

Business interruptions due to COVID-19

As you are likely already aware, most policies do not offer coverage for business interruption (BI) due to pandemics. However, there certainly are coverage options that could encompass this situation. It all comes down to your specific plan.

There are different types of business interruption coverage, usually included as an add-on to an existing commercial insurance plan. This type of add-on would be for a situation where a business had to temporarily shut down. Again, there are all kinds of nuances and different triggers for coverage. For example, many BI policies require that a business has actually sustained physical damage. Speak to your broker to understand the peculiarities of your plan. And be sure to check out this post where we get into more details about what has been happening with BI during the pandemic and what business owners in Ontario need to know.

Property insurance

Many commercial insurance plans cover the property or physical assets of a business. Some plans only cover specific perils named, other plans offer a more comprehensive coverage. Understanding the specifics of your property coverage is important. For example, if your business has ceased operation, there may be a requirement for the property to be monitored.

Vehicles

If your business has vehicles or employees use their cars for business, there could be a savings in terms of insurance, especially if the vehicles are no longer in use, or if the car is no longer being used for business and only for pleasure. 

Relief measures

You might now be wondering if there are any specific relief measures in place for business insurance, as we have seen in other industries like finance. Similarly to home and auto, there is no blanket relief that applies to everyone. However, many insurers are working with businesses and allowing deferrals of insurance premiums. The best thing to do is to get in touch with your broker or provider and find out what the specific deferral policy is for your plan and what other steps they are taking to support their business customers during this trying time.

Check out this pdf from the Insurance Bureau of Ontario which outlines the relief response of different providers in Ontario: April 23 Industry Response COVID 19 Comparison Chart

Essentially, if your business has changed its operations in any way during this pandemic, whether you are facing a complete suspension of operations, or your workforce is mainly working from home, or any other shift in how you normally do things, the best thing to do is to talk to your insurance rep and find out how this new reality applies to your coverage, what you can do to protect your business and its future and how the insurance company is willing to support you during this pandemic.

Rising insurance rates

Another unfortunate fall out of the pandemic is that the business insurance sector, already troubled prior to the COVID-19 outbreak, is grappling to meet the needs of businesses, many of whom are either struggling to get access to insurance coverage they can afford, or are having trouble getting coverage period.

The problem is particularly acute in the hospitality sector. There have been efforts by the industry to address the challenges faced by these businesses particularly affected by the pandemic. Unfortunately many of these businesses that have been hardest hit by the repercussions of COVID-19, are at the same time facing challenges with getting insurance coverage. Many commercial insurance providers have increased their rates significantly for hospitality businesses, or have pulled out of the market completely (as we talked about here). Click here to learn more about what the Insurance Bureau of Canada is doing to support these types of businesses and here to learn more about the rising rates for business insurance and what is being done to address the challenge.

UPDATE: October, 2021 – check out this post for the latest on business insurance rates in Ontario and what your business can do if it’s having trouble finding coverage.

Resources:

Insurance Bureau of Canada – COVID-19: Canadian home, auto and business insurance information and Q and A on Business Interruption Insurance Coverage

Some good recommendations and steps to take from BDO Canada on managing business losses – Insurance Coverage and COVID-19: Legal Considerations and Loss Quantification Developments

If you’re looking for some general information about the supports in place for businesses in Ontario due to the pandemic, check out the Ontario government’s site – COVID-19: Support for businesses

And for small businesses, check out the Canadian Federation of Independent Business: COVID-19 Small Business Help Centre

The Ontario government is also working to support regulation changes to assist businesses during this time. Check out: Frontline and business: help us support you during COVID-19

On June 18 the Ontario government announced that they were introducing legislation to ban the eviction of commercial tenants. Learn more in this article from the Canadian Underwriter: Ontario to introduce commercial eviction ban bill, retroactive to May 1

We’re going to continue updating and adding to this post as the situation progresses. If you have any suggestions or ideas for what to include in this post, or if you have any questions related to COVID-19 and your insurance coverage, please reach out to our team. You can also reach us on Twitter and Facebook. Please remember that while our offices remain closed to in-person visits, we are still here to support you. If you are looking for a quote for business insurance, head over here.

Image source: FreeDigitalPhotos.net | Stuart Miles