Hi and I hope you are all safe and healthy during this unusual time. We at Maloney & Company, LLC have taken internal steps to inhibit the spread of the virus and will continue to be available to our clients via email and phone without any interruption.
I have received inquiries about what protections your insurance programs might offer in the wake of the COVID19 virus and I wanted to share the initial information we have with you.
We will continue to work with insurers on their responses to this situation and will alert you if there is a meaningful change. If you would like to file a claim linked to the COVID19 situation under any of your policies, we are prepared to help you with that.
Suggestions for handling your practice during this period:
- Be vigilant about correspondence and file documentation during this time. Delays occurring from supply chain disruption are typically borne by project owners under the force majeure provisions under AIA contracts, but it is important to identify any attempt by a client to try to shift this burden to you. Also resist efforts to set you up for a delay claim based on a workforce shortage by contractors that don’t have an adequate labor supply, but do notify your client in writing if you have concerns about project completion schedules.
- We may experience product or material shortages, and you may be asked to authorize substitutes. Substitutes may not be of the same quality, or may be more expensive, or both. Be sure to get written clarification from the owner if changes are requested of you, in addition to doing your normal due diligence.
Insurance companies also respond with suggestions on how to keep safe during this period, and refer policyholders to the CDC website.
In general, the carriers have not made any large/sweeping comments on the situation. The bad news is that we cannot get an “upfront” assessment of how any policy would respond. The good news is that it leaves the window open for individual claims to be decided on a case by case basis, so it is not a blanket denial of claims, and it also allows insurance companies to broaden coverage if they choose to, or are instructed to, in response to this unprecedented situation.
****The one response from insurers that overrides all others is that hypothetical advice does not override the policy terms and conditions. The disclaimers often read something like this: DISCLAIMER: The policy language is clear and speaks for itself. The information I am giving should in no way bind us to cover any claim nor should be construed to change any of the policy provisions. All actual claim facts will be reviewed on a case by case basis and coverage determined in accordance with the policy provisions in place at the time of the loss.
The most relevant policies during this period seem to be Workers’ Compensation (WC), Business Owners Policy (BOP), and for NY firms, NYDBL coverage (a kind of short-term disability policy) and/or Paid Family Leave (PFL). As we gather more information on these we will send them via email and post it on our blog.
As always, please be sure to let me know if there is anything else I can be doing to help you or your firm. Thanks–Mike
Michael J. Maloney