Is cash flow important to your business?

As we enter the post Covid-19 “new normal”, life may seem very uncertain. We know cash flow is very important to the health of your business.   There is a way we can help your business’s cash flow.  It is pay as you go workers compensation insurance.

Pay as you go allows you the ability to report your payroll to the company each time that you pay your employees, whether weekly, bi-weekly or monthly payroll.

What are the benefits of pay as you go workers compensation insurance?

• Improved Cash Flow
• No down payment
• Real-time premium calculations based on actual payroll
• Automatic withdrawals of your premium payments
• No installment fees
• Reduction in audit exposure due to immediate premium calculations

This pay as you go workers compensation insurance is still relatively new and not all insurance companies offer it but many do.  Give us a call to discuss the options for your workers compensation coverage.

In these uncertain times, why pay a huge amount for workers compensation coverage only to get a huge refund at the end of the policy term when the audit is completed?   Wouldn’t it help your business now to have to pay less each payment and not have a large refund later?

The problem with the traditional payment method of putting a large down payment of 20-25 percent.  Then having 3-6 payments is that in the first few months of the policy term it creates a negative effect on your operating cash.   Most employers earn revenue thought the entire year, it makes sense to pay insurance premiums over the entire year.

At Huff Insurance we are always looking for ways that we can help your business succeed.

Smaller premium workers compensation accounts may not benefit from this option.  But if your premium is $5000 or greater, then it  is a good alternative payment option.

Pay as you go workers compensation insurance (i.e. Smart Pay) is another means to allow you, the policyholder, take control of your cash.

Smart Pay is a smart and convenient pay as you go billing option for workers compensation policies.

With most of the carriers you do not need to have outsourced your payroll to get this option.  Most carriers with this option have a way to log in and submit your payroll or email them a payroll summary report from your payroll software or complete a worksheet provided by the insurance carrier.

Let the insurance professionals at Huff Insurance look at the options available to you to see if Your Way Pay is a great option for your business.

The amount of each payment will vary with each payroll, based on the amount of payroll reported for that period and the classifications for the employees.

If you are interested in this way to handle your workers compensation expenses, contact us today.

You will still have an audit with this payment method; however, it will be an abbreviated audit where the company will just be looking to confirm subcontractors and payroll verification.

Would life insurance make a gift for your graduate?

Your recent graduate needs more than just a gift card or cash.  Both of which will be gone in the matter of days or weeks.

What should you get your graduate?

As a parent of two recent graduates, one from college and one from high school, this is certainly something that was on my mind.

Life Insurance is the best gift that you can give your recent graduate.

Why?

• It will not be any cheaper than it is TODAY
• The future is unknown. Although your graduate is healthy today, the future is uncertain
• You are guaranteeing their insurability

So, what I did for both of my kids at their high school graduation:

I got them a whole life insurance policy, which is a permanent life insurance policy.  It is paid on 1 time per year for 20 years and then it is paid in full for the rest of their lives.

I agreed to pay the premium for the first 4 years until they graduate college.  Then they are responsible for the remaining years.

Did I get them a small life insurance policy, just enough to cover the funeral? 

No, I got them $250,000 of life insurance coverage.

Why?

Today, they do not have debt or many assets, other than a bank account, but I know that is going to change.   I wanted them to have enough coverage so that if they can not get insurance in the future, the amount of coverage that they have now is substantial enough to give them a decent level of  protection.   It can be there to help with family expenses, mortgage, and debts that they may have as they progress through life.

My dad told me that those who do not have life insurance, do not have anyone they love.  Because, if they have people they love, they want them taken care of when they are no longer here.

So, you might have a child, grandchild, niece or nephew that are graduating this year, life insurance is a great way to show them your love.

I know that they are young, but that is why the coverage is so inexpensive.    My daughter, a few months before graduation was diagnosed with an ovarian cyst.   (A very large one that was over 30 pounds.) There was a concern that it could have been cancerous.  Thank goodness it was not! But that scare showed me the reality, just because they are young does not mean that bad things will not happen.

The cost for the 20-year paid up whole life policies were between $550-$750 a year.     This is less than $63 a month.  Which is much less than the average graduate receives in gifts.

And, they only pay for 20 years.  So, by the time that they are having their family and bills are growing, they do not have to worry about paying for life insurance.

I could have lowered the annual cost by having them pay over a longer period of time.  Or I could have reduced the overall cost by paying the entire premium in a single pay option.

So, as you think about how to celebrate the graduation of your senior, consider life insurance.  You would be protecting them now and for the future.

Give us a call at Huff Insurance for questions on life insurance and how we can help you have a plan for your graduating senior.

Does you business have employees working remotely?

As we are all getting us to the new normal as we cope with the COVID-19 life, many businesses have gone to remote workers.   Due to the coronavirus, a lot of businesses sent employees to work remotely without having clearly written remote work practices.

This is not the best process for your business.   There is more susceptibility to cyber crimes when employees work remotely. And there are other employee/employer issues that can develop as the 9-5 workday disappears.

Some employers see a flexible work arrangement as an employee only benefit.  Most have recognized that giving employees flexibility and the ability to work outside the office or outside the traditional work hours has made employees more productive.

This productivity has shown to greatly benefit the business. But, it has led to a blurring of the lines of personal and work life and the expectation that we must be available 24-7.

There are different types of remote work arrangements:

• As needed remote work – either when needed or an emergency situation such as a sick child, or weather or pandemic
• A flexible work arrangements- someone who works part of the time on a regular basis
• A remote worker- someone who works from home 100% of the time

To create a successful remote work program:

1. Evaluate the needs of the position and determine if the employees physical presence is needed full time, part time or periodic meetings.
2. Decide which remote work option might be the most viable work option
3. Identity which employees have the knowledge and experience to be considered for a flex/remote work arrangement
4. Look at the different communication and collaborative tools such as Zoom, Goto Meeting and Skype
5. Develop a guide
6. Choose a pilot program or a trial group
7. Schedule a company wide meeting to discuss flex-work arrangements
8. Train the staff how to use communication and collaborative tools
9. Implement, monitor, and change as needed

What should be in your Remote Work Guide?

• Description of the various work arrangements
• Corporate policies and procedures for remote work
• Company wide and department meeting times
• Rules and guidelines for family during work hours, such an interruptions, noise, etc
• Child-care policy
• Home office setup requirements
• Security requirements
• Home computers maintenance guidelines

Considerations for the employees home office

Make sure that the employee has an area that can be designated as their work area. The work area should have a door that can be closed so that work may not be disrupted.

• They need a desk large enough for the computers and monitor(s) and other equipment
• A PC or laptop— (see security concerns)
• High speed modem and good and reliable connectivity
• Smart phone or VoIP handset or headset

Security Concerns with employees working remotely

1. For employees that occasionally work from home, provide them with remote access from home computer to their desktop computer
2. For employees who work from home a few days a week or all of the time, provide them with a laptop or a desktop to use from home
3. Basic security measures should be implemented whether it is a supplied computer or the employee’s computer:
   • The user must have a strong password minimum of 8 letters, including special characters, upper and lower case
   • Must be configured to manually enter passwords to the organization’s systems/website
   • Client information is confidential. If there are other household members using the same computer, your employee must sign off the remote session or business applications whenever they leave their desk
   • Must have a secure, private internet connection
   • Operating systems updates and Microsoft and operating systems updates should be working properly and updated automatically
   • Firewalls and antivirus programs should be updated and maintained
   • If the business is providing the computer, the employee should not be allowed to download applications from other sources.  Games, mobile apps, coupon sites can contain virus and malware
   • Clear procedures should be written and followed for logging off and closing their computer when not in use
   • Train and educate employees on security issues
   • Periodically schedule a check on all remote devices

Keeping your remote employees engaged

Keeping your remote employees engaged with the business and with each other is very important.  It is important to the success of your business and to your business culture.

We have a separate blog below that goes over ways to keep your remote employees engaged:

Engaging Remote Employees.  5 ways to engage your remote employees

As we move into these new work environments we need to be concerned with the cyber liability for our business and the effects on the employee/employer relationship.  The insurance coverages for cyber liability insurance and employment practices liability insurance (EPLI) along with good business management and security processes are what you need to protect your business.

Are Auto Insurance Companies Giving Refunds Due To The Coronavirus Pandemic?

You may have head rumors that auto insurance companies will be giving refunds because of our current coronavirus, or COVID-19, pandemic.  The insurance companies are offering refunds because most of us are using our vehicles less during the state mandated shelter in place orders.  Most are referring to them as their Shelter In Place Rebate.

It does make sense.  We can look at the roads during the day and see the drastically reduced traffic.  This is due to several reasons, including:

• Non essential business closures
• Layoffs
• More essential employees are working from home
• People are doing business online whenever possible (shopping, banking, making payments to companies, etc.)

Because of this, most of the nations state insurance commissioners made a recommendation to the auto insurance companies to offer lower rates during the shelter in place periods.  We have come to expect that when the insurance commissioner makes a recommendation, companies usually listen.  And they did listen as most companies have started offering auto insurance premium rebates for this coronavirus pandemic period.

How are auto insurance carriers providing these refunds due to coronavirus?

The insurance companies were not mandated to provide the refunds for auto insurance.  Because of this, each auto insurance company is handling their coronavirus refund process differently.

If you have outstanding premiums due on your current auto insurance policy, most companies are simply crediting the amount of your refund either your May payment or crediting your May and June payments respectively.

If you had already paid your insurance premiums in full, most auto insurance companies are providing the refunds back to you in the same manner in which you paid your premiums.

So what does that mean?

If you paid your insurance premiums via credit card, the company will provide a credit back to the card that was used to pay the premiums.

If you paid via cash to your agent or via check, the auto insurance company will most likely be cutting you a check for the refund amount.  Keep in mind that checks can take two to three weeks to get cut and mailed from an insurance company.

If you paid vie direct debit from a checking account or auto EFT, then it is up to your specific company as to how they will be refunding the premium.  Most companies will be sending a check to you for your refund.  The reason is that most of the forms that are signed to set up auto EFT payments or even one time payments, are for debits only.  If the form does not give permission to credit your account, then the company cannot offer the credit in a direct deposit format.  For the ones that do address the credit, they may be refunding your premium directly to your bank account.

How of an auto insurance refund should you be expecting?

Most are providing a 15% refund of the April and May insurance premiums.  Keep in mind that this may not be the the same as 15% of your payment amount.  Most insurance companies do not offer a payment plan that is 12 equal payments.  And the wording of the rebate is “15% refund on two months of their annual auto premium as of …..”

Here is a simplified example showing the difference in calculation:

1. Say your auto insurance premium is $1,200 for the year.  A lot of payment plans are 10% down and 9 installments.  So in this case, your “monthly” payment for April and May would be $120 per month.   So you may be thinking that your rebate will be 15% of $240 or $36
2. But let’s look at what is the true “monthly” premium.  If it is a 12 month policy and the premium is $1,200, the actual monthly premium for the policy is $100 per month.  So your rebate may actually be 15% of $200, or $30.

You can see that there may be some confusion over the actual amount of the refund based on these two calculation methods.  From what I am hearing, the companies are using method number 2 to calculate.  That method will provide the same percentage benefit to each client, regardless of what billing plan they have chosen.

Here is a list of auto insurance companies and their current refunds being offered (all are subject to state regulator approval):

• SAFECO Insurance – 15% of two months of auto insurance premiums in as of 4/7/2020
• Travelers Insurance – 15% of April and May auto insurance premiums for policies that are in force anytime between 4/1/2020 and 5/31/2020.
• Nationwide Insurance – $50 flat refund for policies that were active on 3/31/2020
• Progressive Insurance – Auto customers who have a policy in force as of April 30^th will be credited 20% of their April premiums in May.  Personal auto customers with a policy in force as of May 31^st will be credited 20% of their May premiums in June.
• Encompass – 15% of monthly premium for April and May for policies in effect on 3/31/2020
• The Hartford – 15% of two months auto insurance premium for policies in force as of 4/1/2020

Is your auto insurance company is on this list? If not, reach out to them to see if they are offering any kind of rebate program similar to these.

Have you been affected by COVID-19? Are you having trouble making your insurance payments?  If so, most companies will work with you to make payment arrangements.  See our blog and video below regarding making arrangements for your insurance payments.

 

Check out our other blogs regarding the coronavirus pandemic.  There are several resource links on COVID-19.   Also,  there is advice on how the different actions can affect your personal and business insurance.

Making Arrangements For Your Insurance Payments During COVID-19 Outbreak

How can the coronavirus pandemic affect your business insurance?

How can the coronavirus pandemic affect your personal insurance?

Coronavirus Resources(COVID-19)

Coronavirus- Will My Business Income Insurance Pay If I Have To Shut Down My Business Because Of The Coronavirus?

The coronavirus pandemic and your personal insurance

Has the coronavirus pandemic has caused you to use your personal vehicle or home in a business manner?  If so, you will need to review your personal insurance plan.

The coronavirus caused the government to shut down non-essential businesses.  Many of our clients have found they are being asked to work from home.  Or do things that were not originally hired to do.  Things such as using their personal vehicle for delivery.  I have also seen beauticians, accountants and yoga instructors offering to provide services out of their home.

And now with the daycare centers  being shut down, we know people will be tempted to offer to watch non family members in their home for a fee.  And once you start watching non family members, it creates issues with coverage under a standard homeowners policy,

The coronavirus pandemic may have adverse effects on your personal auto insurance

For example a lot of businesses have started offering delivery of their products.  And they are having employees use their personal cars for the delivery.

The standard ISO personal auto insurance policy excludes the use of an auto used for delivery of food or products.  So insurance carriers may deny coverage based on this exclusion for the delivery of food, grocery or other deliveries.

You don’t want to find out after a loss that the insurance company is denying coverage.

If you are using the vehicle in this manner,  you should let your insurance company know.  Even if it is just temporarily.

The good news is that we have a few of our companies that are allowing delivery during these tough times.  They are allowing it as long as it is a temporary solution to the restaurants having to offer pickup and delivery services only.

Also, ask your employer if they have a coverage called “Non-Owned Auto” coverage on their business insurance policy.

Here are a some things you can do to save money on your auto insurance:

• If you are now working from home, call your agent and have them adjust the usage of your car from commuting to pleasure use.
• Call your agent to see if your company offers a discount for using a telematics device.   Since you are not driving your car as much, the discounts for using the devices can be larger.
• Evaluate your comprehensive and collision coverage deductibles.  If your deductible is really low, say $100 or $250, raising them to $500 or $1,000 could create a nice savings.

Here is what not to do to save money on your auto insurance.

DO NOT lower your liability limits. 

You may be thinking that you are not driving as much, so why do you need the higher limits?

Think about the economy and job market of today.  Your odds of getting into an accident may be reduced because you are driving less.  BUT, because of the high unemployment rate and the economic uncertainty, the odds of being sued if you are in an accident are high. So it is more important now that ever to make sure that you have adequate liability limits on your auto insurance policy.

The coronavirus pandemic may have adverse effects on your homeowners insurance

Are you now conducting your business from your home?

We are seeing a lot of people who cannot work at their business location due to the COVID-19 shut downs offering to conduct business or provide services at their home for their clients.

On the homeowner’s insurance side, there is an exclusion for business activities for liability coverage.  So if you have customers coming to your home for a haircut, to get their taxes done, or for a yoga class, there is no coverage if they get injured on the premises.

So if your client falls on a step in your home, trips over your kid’s toy, or your dog bites them, there may not be coverage since they were in your home for business purposes.

Another concern is that the current ISO HO-3 Homeowners form only gives $2,500 on premises and $1500 off premises for personal property primarily used for your business.  If your business equipment is worth more than $2,500,  contact your insurance agent to have this coverage increased.

If you are conducting business from your home, call your insurance agent.  They may be able to add a home business endorsement to your existing home insurance policy.  If not,  they may be able wot write an affordable home based business insurance policy.

Are you now working from home for your employer?

With today’s technology, telecommuting is easier that ever before.

To avoid layoffs, the government is encouraging businesses to allow employees to work from home during this time of social distancing.  And they are even willing to help pay for technology purchases that may be needed to allow for this to happen.

Many companies have been sending computer equipment home with their employees to allow them to work remotely.  I know we have done that ourselves here at Huff Insurance so we can provide seamless great service to our clients.

Do you have items that belong to your employer at home?  If so. a standard homeowners insurance policy only will cover up to $500 for personal property of others in your care, custody, and control.  Your company’s equipment would fall under this category.

So check with your company to make sure that they have the proper insurance business insurance coverage to protect their equipment.

Are you angry at your former employer or other businesses for their decisions during the coronavirus pandemic?

If so, keep in mind that personal injury is not automatically included on the homeowner’s insurance policy. So think twice before going online and bashing your employer or other business.  Also, if you “hear” of a business that may have had an employee diagnosed, be careful about spreading the news.  Posting of rumors on social media can cause great financial harm to businesses.  If this happens, you are open for a lawsuit if you are posting or sharing posts that may not be factually correct about a business.

Social media is a great platform to voice your opinion.  But if you are sued for slander, or libel then you would not have coverage without a personal injury endorsement on your homeowners insurance policy.

As people like to say, you do have freedom of speech, but not always freedom from consequences.

Has your employment status changed due to the pandemic?

If you are laid off then the usage of your vehicle may have changed.  Contact your insurance agent or company to let them know.  They could change the usage of the vehicle or add a low mileage discount until you return to work.  During this tough time, every dollar will count.

If the way that you work has changed because of the coronavirus pandemic then please give us a call to discuss how these changes impact your personal insurance.

Most carriers are trying to work with clients on their payments but it is important that you contact your insurance company before the payment is due to make arrangements and this will allow them to be the most flexible.

We know that these are trying times and people are trying to do what they can to support their families, but we don’t want you to have an unexpected loss that causes you more of a financial hardship.

*Please note that policy eligibility and policy coverage vary by company and by state.  Please contact your insurance company or insurance agent to see how your situation will affect your specific insurance policy.

HERE ARE OTHER RESOURCES THAT WE HAVE PUT TOGETHER FOR THE CORONAVIRUS PANDEMIC:

Are Auto Insurance Companies Giving Refunds Due To The Coronavirus Pandemic?

Making Arrangements For Your Insurance Payments During COVID-19 Outbreak

How can the coronavirus pandemic affect your business insurance?

Coronavirus Resources(COVID-19)

Coronavirus- Will My Business Income Insurance Pay If I Have To Shut Down My Business Because Of The Coronavirus?

The Coronavirus Pandemic and Your Business Insurance

If the Coronavirus Pandemic has affected your business, you may want to review your business insurance.

This COVID-19 pandemic has caused many businesses to suspend or alter their operations.

If you have had to do any of the following for the coronavirus pandemic, you may want to review your business insurance.

• Lay off employees
• Suspend operations of your business (i.e. offering delivery of products or food)
• Change the way you do business
• Change the products that you are providing or manufacturing

Any of these changes may impact your business insurance.

Cancelling you business insurance may not be your best option

If you are unable to do business during this time, you may be thinking about cancelling your business insurance until the coronavirus pandemic passes.

Before making that decision, do these two things first:

1. Contact your insurance agent to see if there are any adjustments that can be made to your policy to lower the insurance costs during these slow times. (Details later in this blog)
2. Call your insurance company to see if they can suspend your insurance payments for a period of time. The Maryland Insurance Administration has made a plea with the insurance companies to make accommodations to those that are affected by the pandemic.

Cancelling your business insurance now can make it more expensive for you when you want to buy it again. Over the years, you have earned renewal discounts, experience modifications, and underwriter credits if you have had few claims and paid your bills on time. These are not available to new businesses or clients with a lapse in coverage. This is why you should avoid cancelling your insurance at all cost.

Normally, the cost of getting the new policy will be more than continuing your current policy. Don’t let a short term interruption in business to affect your insurance costs for the next three to five years.

We hope that this coronavirus runs its course as quickly as possible so we can all get back to normal business.

We know that being shut down or having layoffs for even a month can affect your business.

Most liability insurance policies are based on revenue or payroll and all workers compensation policies are based on payroll.

Unfortunately, it is too soon to know exactly when we will get back to work. But, if you have projections on how the shutdown will affect your payroll or sales, then please give us a call. We may be able to  adjust your policy now.  Rather, than waiting for an audit at the end of the policy term.

Remember, that your policy year is usually not the calendar year, so here is what to do:

1. Review your policy for the effective date and the current payroll or receipts that the coverage is based on.
2. Determine how much payroll/sales you have had since the inception date until now.
3. Project out your estimated payroll/sales from now till the end of the policy term taking in consideration the approximate of time that you will be closed or downsized (keep in mind some businesses are expecting up to a 50% increase in business once they do reopen).
4. Contact Huff Insurance to make the appropriate changes to your policy now.

If your operations have changed, such as offering delivery at your restaurant for the first time or manufacturing new products, please contact us immediately. There may be different classifications or coverages that need to be added to your policy temporarily to give you the coverage you need for the added exposure.

Are you a restaurant that has had to start food delivery?

If you are a restaurant that has had to start offering food delivery by your employees, we have good news for you. Most of our companies are adding the Non-Owned auto endorsement to their policies. This covers you if your driver causes an accident and you get brought into a lawsuit.

We even had a couple that did NOT charge an additional premium as long as the delivery stops when the state of emergency is over and things get back to normal. You did not read that wrong; some insurance companies are offering an additional coverage for FREE to help you through these tough times.

Also, please visit https://www.huffinsurance.com/blog/important-coronavirus-links-and-resources/ for a list of government links and resources to help you get through this time.

Huff insurance wants your business to continue and wants to help work with you to make the necessary changes to your coverage now to help you through this trying time.

Please reach out to us if you have ANY questions on how this pandemic will affect your business insurance.

*Please note that policy eligibility and policy coverage vary by company and by state. Please contact your insurance company or insurance agent to see how your situation will affect your specific insurance policy.

Here are other resources that we have put together for the coronavirus pandemic:

The “new normal” may include your business having employees working remotely

Making Arrangements For Your Insurance Payments During COVID-19 Outbreak

Important Coronavirus Links And Resources

How Can The Coronavirus Pandemic Affect Your Personal Insurance

Coronavirus Resources(COVID-19)

Coronavirus- Will My Business Income Insurance Pay If I Have To Shut Down My Business Because Of The Coronavirus?

 

Compilation of links and resources regarding the coronavirus (COVID-19)

General Links For Everyone

• Maryland Department Of Health Link: https://coronavirus.maryland.gov/
• Federal Centers For Disease Control Link: https://www.cdc.gov/coronavirus/2019-ncov/index.html
• Federal Coronavirus Resource Page: https://www.coronavirus.gov/
• Anne Arundel County Department of Health Link: https://aahealth.org/covid-19/
• Maryland Division of Unemployment Insurance  https://www.dllr.state.md.us/employment/unemployment.shtml

 

Links for Business Owners

• Paycheck Protection Plan (PPP) – SBA Loan Application and Information (PDF’s), Call your bank to see if they are participating with the SBA Programs –  Paycheck-Protection-Program-Application-3-30-2020-v3 ,  PPP Borrower Information Fact Sheet , Coronavirus Emergency Loans Small Bus Guide
• Federal Employee Rights for the Families First Coronavirus Response Act required poster (must be posted by April 1st in all businesses with less than 500 employees) Families First Coronavirus Act (FFCRA) Employee Rights Poster
• Frequently Asked Questions for the Families First Coronavirus Response Act https://www.dol.gov/agencies/whd/pandemic/ffcra-questions?inf_contact_key=84c2a4b5cea3c98d663c3624e4a1ac7b
• Maryland Insurance Administration Advisory On Business Interruption Insurance Link:  https://insurance.maryland.gov/Pages/newscenter/NewsDetails.aspx?NR=2020256
• Maryland COVID-19 Layoff Aversion Fund Link: https://www.dllr.state.md.us/employment/covidlafund.shtml
• Maryland Department of Commerce Business Express Link: https://businessexpress.maryland.gov/
• Maryland Small Business CIVID-19 Emergency Relief Programs Link: https://commerce.maryland.gov/fund/maryland-small-business-covid-19-emergency-relief-fund-programs
• Comptroller of Maryland Resource Page (including new tax filing deadlines and a list of restaurants offering carryout) www.marylandtaxes.gov 
• Small Business Administration Disaster Loans Link: SBA.gov/Disaster
• Federal Essential Business Guidance Link: https://www.cisa.gov/publication/guidance-essential-critical-infrastructure-workforce
• Maryland Essential Business Guidance Link: OLC-Interpretive-Guidance-COVID19-04

 

Blogs by Huff Insurance:

• Coronavirus- Will My Business Income Insurance Pay If I Have To Shut Down My Business Because Of The Coronavirus?
• How can the coronavirus pandemic affect your business insurance?
• How can the coronavirus pandemic affect your personal insurance?
• Coronavirus Resources(COVID-19)
• Making Arrangements For Your Insurance Payments During COVID-19 Outbreak

 

 

Do you need help with making your next round of insurance payments?

We know these times are tough. We understand that a lot of our clients have been affected by the closures and shut downs. And, we understand this could affect your ability to make your insurance payments.

The Maryland Insurance Administration has requested that insurance companies make reasonable accommodations to those that have been affected by COVID-19  If you feel that you may not be able to make an upcoming insurance payment, contact your insurance company now. They are willing to make arrangements.

Please do not simply skip a payment without calling as this may result in a cancellation of your policy. And please do not wait until a cancellation has been issued or until after the cancellation date.  If you do wait, it may be too late to make arrangements.

 

How can Huff Insurance help you

We have made the decision to close our lobby to the public, but we are still here for you.  If you are not sure who your insurance company is, feel free to call us or email your account manager to get that information.  If you are unsure of your account manager’s email, you can email us at info@huffinsurancec.com.  We want to make sure you can make the proper arrangements for your insurance payments and help you get through this difficult time.  If we work together, we can make it through this.

Here is a release from the Maryland Insurance Administration regarding insurance payments:

More information and resources regarding the COVID-19 outbreak:

Coronavirus Resources(COVID-19)

Coronavirus- Will My Business Income Insurance Pay If I Have To Shut Down My Business Because Of The Coronavirus?

Coronavirus Resources (COVID-19) for Businesses and Individuals  

The outbreak of coronavirus has us all on edge.  The state of Maryland and the federal government has put together great coronavirus resources for both businesses and individuals.

Maryland has a website that is a great resource to get up to date information and statistics on the coronavirus.  It can be found at https://coronavirus.maryland.gov/

On the Maryland coronavirus site, you can find the following information:

• Up to date statistics on confirmed cases in a county by county format using a nice Case Map Dashboard (updated at 10am daily)
• Background on the COVID-19 virus, how it spreads and primary symptoms
• Prevention tips
• Current government guidance
• Preparedness tips
• Frequently asked questions on the virushuff

Coronavirus resources for affected businesses

We are getting a lot of questions from our business clients asking if their business income insurance will cover their losses due to the government shutdowns of their business.  The short answer is that there would be no coverage because there was no direct physical loss to the business property or location.  Nancy Nicklow wrote a blog that is worth the read on this subject titled – Coronavirus- Will My Business Income Insurance Pay If I Have To Shut Down My Business Because Of The Coronavirus?

We were provided a few of great resources from the Maryland Department of Commerce and the Small Business Administration.  So although there may not be insurance coverage to cover losses, there may be help and assistance from the federal government to help you survive this unique period in time.

The Maryland insurance administration issued and advisory on business interruption insurance as it relates to the coronavirus pandemic.  Click here to read the advisory.

Governor Hogan has ordered all non-essential business to close as of 5pm on 3/23/2020.

Here are a couple of resources to see if you are a business affected by the closure:

https://www.cisa.gov/publication/guidance-essential-critical-infrastructure-workforce

OLC-Interpretive-Guidance-COVID19-04

The Governor also stated that Maryland has waived the waiting period for unemployment and it is available to business owners who have had to close their doors if eligible.  Here is the link for the MD unemployment.

https://www.dllr.state.md.us/employment/unemployment.shtml

Maryland Department of Labor Resources:

Governor Larry Hogan and the Maryland Department of Labor have launched the new COVID-19 Layoff Aversion Fund, which is designed to support businesses undergoing economic stresses due to the pandemic by preventing or minimizing the duration of unemployment resulting from layoffs. The award (up to $50,000 per applicant), will be a quick deployable benefit and customizable to the specific needs of your business to minimize the need for layoffs.

Labor is accepting grant applications from small businesses for awards from now through 30 days after the State of Emergency ends (subject to funding availability).

COVID-19 Layoff Aversion Fund – Workforce Development and Adult Learning

Kelly Schulz, the Maryland Secretary of commerce, provided the following coronavirus resources:

FROM KELLY SCHULZ, Maryland Secretary of Commerce

I highly recommend that all of your impacted businesses go to  https://businessexpress.maryland.gov/

It is a portal that was set up Friday and we are posting all updated information as we receive it. Additionally, please have your clients use Secretary.Commerce@maryland.gov to ask specific questions. This is a collaborative effort for all agencies to be able to quickly and collaboratively answer questions. Their are FAQs on the portal. If you could help to  widely distribute this information, it would be greatly appreciated. Obviously, thousands of businesses have the same questions and concerns and we need to address them all. 

Thank you, thank you, thank you for getting this in front of them and their staff. Trust me….it will save them so much time because everyone has a question right now. 

Kelly 

They have also released several programs for small business relief here:  https://commerce.maryland.gov/fund/maryland-small-business-covid-19-emergency-relief-fund-programs

The Baltimore office of the Small Business Administration provided the following COVID-19 resource:

FROM THE SBA – Baltimore Office

Our contact at the SBA sent this link and advised that SBA loans would fall under the category of the Economic Injury Disaster Loan Program.  This program provides small businesses with working capital loans of up to $2 million to give you vital economic support to help overcome the temporary loss of revenue you are experiencing. 

Here is the link for the  Disaster Loans: SBA.gov/Disaster.

What we are facing right now is unprecedented during our lifetime.  It is a very fluid situation and things are changing by the hour.

Staying informed is more important now than ever.  There is still a lot of uncertainty as to where this virus will be taking us.

Knowing what coronavirus resources are available to us can help us navigate through these tough time.  We will do our best to push out what we know as we get to know it.

If there is anything we can do for you during these trying times, please let us know.

 

Do I have business income insurance if I have to close due to the coronavirus (COVID-19)?

Many businesses are worried about being affected by a business closure due to the coronavirus.  We have had several business call and ask if they have business income insurance if they are forced to shut down due a public health issue.

Unfortunately, the insurance industry is slow to respond to these contemporary issues.    

Most traditional forms of business income coverage do not address the indirect effects of outbreaks and pandemics, because of public fear of travel.

The three industries that are most affected by this are the travel & tourism industry, and the professional sports industry and entertainment industry.  These industries tend to draw large crowds of people in close proximity.  And the government is warning against being in large crowds ion confined areas to prevent the spread of the disease.  Cruise lines and airlines are being very flexible with their customers in their cancellation and re scheduling processes during this time.

Eventually, we can see the warning affecting other industries, such as restaurants and retail stores.  And as this happens, we can see the question of whether or not business income insurance will pay for the lost business associated with any required shutdowns or closures.

The Maryland Insurance Administration Issued An Advisory on Business Income Insurance

Our friends at the Maryland insurance administration issued an advisory on business interruption insurance with regards to the coronavirus pandemic.  Click here to read the advisory bulletin. 

Why wouldn’t business income insurance pay if a business has to shut down for the coronavirus pandemic?

Business income insurance  coverage requires that the trigger for the business income loss be caused by covered cause of loss under the policy.

So isn’t a closure due to civil authority a covered loss on the business income insurance?

The language for the civil authority cause of loss in a standard policy will not cover a forced business shutdown due to the corona virus.  The wording states that

“Extra Expense caused by action of civil authority that prohibits access to the described premises due to direct physical loss of or damage to property, other than at the described premises, caused by or resulting from any Covered Causes of Loss.”

A shut down due to a viral pandemic caused by the COVID-19 coronavirus would not trigger the business income insurance coverage.  This is due to that there is no direct physical loss of or damage to property that is causing the civil authority to shut down your business/

When it comes to the state or the nation declaring that businesses be closed for a period of time due to the virus there is currently no business income insurance endorsement that will provide coverage during this shut down.

ISO (Insurance Services Organization), who writes insurance policy forms is reviewing the issue of the effects of the coronavirus on business income insurance.  ISO is considering writing forms that would have either a dollar limitation or a time limitation for business income insurance in the case of a shutdown due to a pandemic, such as COVID-19

Insurance carriers are also looking to write their own forms but these forms must be approved by the Maryland Insurance Commissioner and reviewed and also the rates for the endorsement must be determined.   Unfortunately, the insurance industry works at a snail’s pace and most likely these features will not be available in time to

So can your business do in the meantime?   Do what you can to stop the spread of the coronavirus.

• Make sure that you are discussing proper hand washing techniques
• Encourage employees that are sick to stay home and do not return to work until they are fever free for 24 hours
• Allow employees to remote work if possible
• Develop a communication plan to keep employees up to date with the status of the virus
• Assess staffing, what work is crucial and what employees can do that task
• Provide disposable wipes so that commonly used surfaces such as doorknobs, desks, keyboards can be whipped down
• Begin cross training now to avoid gaps in production
• Can business operations be conducted at alternate locations if the current location is quarantined?
• Stock up on basic office supplies as well as supplies needed for production and other work task
• Perform routine cleaning of the office (weekly). Ensure that surfaces are whipped down

If you do need to travel , make sure to check your travel insurance policy.  Some have coverage for cancellation for any reason and other do not and have exclusions for pandemic outbreaks.

As we always advise, please check with your specific business insurance policy and insurance agent to discuss your actual insurance coverage.  Policy coverage varies by company and by state.  The examples we used was from a ISO form that is filed in the state of Maryland.

*Please note that policy eligibility and policy coverage vary by company and by state.  Please contact your insurance company or insurance agent to see how your situation will affect your specific insurance policy.

Other Relevant Blogs by Huff Insurance:

• Coronavirus- Will My Business Income Insurance Pay If I Have To Shut Down My Business Because Of The Coronavirus?
• How can the coronavirus pandemic affect your business insurance?
• How can the coronavirus pandemic affect your personal insurance?
• Coronavirus Resources(COVID-19)
• Making Arrangements For Your Insurance Payments During COVID-19 Outbreak