Were you Deemed Non-Essential in Your Area? File an Insurance Claim

RCS Influencers Seth and Ashley Pietsch say that contractors may have options even if pandemics are not covered by business interruption insurance.

These are times like we have never seen in our lifetimes. It’s resulting in contractors having to change the way they do business. As of today (March 30, 2020) our state of Oregon still considers construction an essential business. Contractors are having to adapt to follow OSHA’s guidelines on social distancing. We are seeing them use Zoom for safety talks.  You can no longer huddle around the truck or gather to review a site plan. That’s obsolete now.

Contractors need to do whatever they can to try to be in compliance with these guidelines. We don’t know if this is temporary or will become permanent but are hoping we will be back to normal in six months.

We’ve been getting a lot of good information from our fellow RCS Influencer Trent Cotney. He’s published many articles and hosted webinars that we are following in order to stay on top of the latest updates. Things are changing so rapidly. Here in Oregon executive orders are coming out weekly as to what businesses must shut down and what is considered an essential business.

Every single jurisdiction will be different in what is considered essential, but things are still very similar in most geographic regions. We are hearing from our contractor customers that they want to know how this is going to affect them and if they have potential insurance coverage if they have to lay off employees or shut their business down. Right now, even insurance companies don’t know how to respond. 

What they are telling us is that every single claim scenario is different and each one has to be treated like it’s on its own island. This pandemic caught every business off guard, even insurance. The Insurance Services Office (ISO) which is an insurance advisory organization that provides statistical and actuarial information to businesses with a focus on property/casualty insurance had to scramble to create product developments, including forms and rules changes that are being released in response to COVID-19.

Most insurance companies don’t provide coverage in the event of a pandemic. When the September 11 attacks happened in 2001, insurance companies didn’t provide coverage for terrorist attacks. They said that it’s excluded, but the federal government stepped in and enacted the Terrorism Risk Insurance Act. There is a chance that the federal government could mandate that insurance companies have to pay out a certain amount on these COVID-19 claims.

Contractors should absolutely file a claim with their business interruption insurance company if they are deemed a nonessential business. It is important to be in direct contact with the insurance company and the insurance adjusters since the situation is so fluid.  

Seth Pietsch is the president of Integrity Insurance & Bonding Inc. (see his full bio here) and Ashley Pietsch is the vice-president (see her full bio here ).