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Property-Casualty and Risk Management Maneuvering in Unprecedented Times

Thursday, April 16, 2020
Property-Casualty and Risk Management Maneuvering in Unprecedented Times
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As the COVID-19 crisis continues, staying optimistic and positive is crucial, yet remains undoubtedly challenging. With all of the health, economic, and financial uncertainties, as a business owner, things may feel like panic on all fronts. If you haven’t already, please visit our COVID-19 Employer Resource Center for continuous updates from key Government Agencies, Local Governments, Medical / Ancillary Carrier Updates, and Industry Associations

We wanted to take a moment and to make sure you know that we’re here to talk through anything. If you need a sounding board, want to hear what others are doing, or have questions, this is the exact reason we are partners together. This is where innovative, and future decisions all come together. Meanwhile, we’ve seen examples of what companies are doing to mitigate the effects of this pandemic. Some businesses are implementing split shifts, meaning one week on, one week off, with a deep clean in between. Another technique is implementing cease job rotation to prevent transmission into another workstation. 

Beyond these two specific examples, Vice President, Tony Hopkins, has a variety of considerations and ideas to maneuver with your risk management program. Some of these include:

Payment Grace Periods 
  • Many carriers and states are placing moratoriums on cancellations, allowing a grace period until May or June.
  • Contact your carrier (direct bill) or Horton service team (agency bill) to note your intentions with the appropriate parties.
Adjust Exposures
  • Consider changing or endorsing your exposures (adjusting Payroll and Sales lower, especially if you forecast a decrease in sales and/or if you need to conserve cash).
Workers’ Compensation Reclassification
  • For Wisconsin exposures/payroll, the WCRB has additional FAQ information 
    • If you have production employees (typically the highest work comp rate) paid while at home – see if your carrier will allow you to classify them as class code 0012 (Paid Furloughed Workers During a Governmental Emergency Order Impacting Employment). There is no premium charge for payroll associated with this class code if employees are NOT working from home (paying them to sit at home).
  • NCCI Guidance for Employers Affected by COVID-19
    • NCCI has now adopted the policy of all using class code 0012 with a $0.00 rate for employees paid, but not working, to be consistent with the guidelines laid out by the state of Wisconsin.

    • See Question 3 in NCCI’s published guidance, found here.

  • Keep accurate records for when employees are working at home versus onsite. It’s likely that the application of these rules will be inconsistent amongst carriers.  Our view is that if you ask proactively, the chances of obtaining your desired result is much is higher.
Production Workers – Productive at Home
  • While being paid for staying at home, workers can still be slightly productive by working on training.
    • Safety, cyber, handbook, management, and cross-training are all options, depending on your primary operations. 
      • This option may require that the employee’s payroll to be placed back into their normal class code.
Business Income Claim Preparation advice 
  • While this may not ultimately be covered, it could be worth a shot.
  • This flyer from Quantum Global Advisors (public adjusters) provides some ideas to prepare for submitting a business income claim.
Auto Lay-Up
  • Some carriers are allowing vehicles not in use to be temporarily removed from the policy using a “Lay-Up” endorsement, saving money on premium.
  • If this offer is taken advantage of, we strongly recommend putting a note in the cab (or locking up the keys) of the vehicle for the driver and administration to make sure that coverage is added back on before the vehicle goes back out onto the road.
Cyber
  • Here are items to consider as the exposure for an incident increases with potential hackers preying and employment matters at the forefront
  • Cyber – remote security protocols, multi-factor authentication and the use of a VPN
  • Notify your carrier immediately to access a Breach Coach if you’ve been breached or even think you may have been breached
Employment Practices Liability
  • Coverage is likely available for layoffs and subsequent lawsuits that could arise from COVID-19.
  • Most policies have employment attorneys that can be accessed for free to provide some guidance and answer questions.
Directors & Officers Liability
  • This will affect renewal discussions depending upon the plan, layoffs, etc.
  • Coverage is likely available if management is sued for mismanaging COVID-19.
Safety Sanitation Programs
  • These are available from our safety consulting team that can be built to suit for each organization and their specific situation (these programs do come at an additional cost. Talk to your representative to learn more).
OSHA
  • COVID-19 illnesses are considered OSHA recordables (even though the flu and common cold are not).  A rash of recordables can spike incident rates, which could potentially lead to an inspection.
Credit Insurance
  • Coverage is still available to insure your accounts receivables for new services or products being sold on a go-forward basis. Discuss with your Horton representative if interested in hearing more about this topic.

COVID-19 will be here for a while, and, yes, life after this may not necessarily go completely back to normal. Even still, knowing that options exist to manage your exposures and uncertainties as best as possible is what we are here to do for you. If you have any further questions, please contact your Horton team member via their direct dial number, their email address, or to be directed to your team member call us at 800-383-8283.

 

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.

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