COVID-19 & Your Insurers
There are many questions being asked, but answers are in short supply.
Linked below are webpages for insurers we represent and transact business with and their memos, press releases, policies and statements regarding the current Coronavirus situation. In most cases, we have linked to their pages in lieu of copying these notices directly because of the frequency of updates and changes; we want you to be able to find the latest, most topical information regarding your questions and concerns.
With regards to payment arrangements, while we can assist you in contacting your insurer we don't have the authority to amend their payment terms - only they can agree to any amended payment schedule - so in most cases you will need to contact them directly to negotiate and finalize these arrangements. Thank you and stay safe.
Imperial Premium Finance Specialists 4/1/2020 Memo |
Progressive 4/1/20 Memo |
What Can We Do - Common Questions & Issues:
Many people want to cancel their coverage outright. In most cases, we would advise against this. Even if you're completely shut down you will still need to keep your property insured and premises liability in place. Cancelling your liquor liability coverage means the ILCC will be notified and they will revoke your state liquor license, aside from whatever negative action your local liquor authority may take. Cancelling your Work Comp may be an option if you have absolutely no workers any longer, but doing so will also trigger an immediate audit. If you're still open in limited capacity - carry out or delivery - then you can't outright cancel any of your coverage.
When bars and restaurants are free to open again, there will then be a rush to place coverage. Frankly, we and most insurers are not equipped to rewrite so many clients en masse at once. So while you could re-open on a given date, securing coverage - nevermind from us - from anyone, may take days or weeks beyond that, leaving you again missing out on income.
Whether you're fully shut-down or operating on a limited basis, an alternative to cancelling policies outright would be to lower the sales and/or payroll used to underwrite and rate those policies. How accomodating companies can be varies from insurer-to-insurer, state-to-state, and policy-to-policy. We can't make any guarantees or blanket statements as to what kind of relief they can provide to bring monthly payments down on an interim basis.
Even if changes can be made to your policy(ies), there may be unintended consequences down the road to consider. If payments are slashed to make them more manageable during the shut down, but business resumes at some point and your sales and staffing return close to normal, you could wind up with a substantial audit after the policy term. Audits are generally due as lump sums, so a considerable one can be a tough pill to swallow. Exchanging the minor relief of a slightly smaller monthly payment over a few installments for the headache of a lump-sum, multi-thousand dollar audit may not be the relief it seems to be initially.
We cannot say at this time whether or not the current circumstances are covered. Typically, business income and spoilage coverage, the two most common concerns folks have right now, require direct physical damage to your business. Examples such as a fire, lightning strike, a tree falls on your building, a customer's car collides with your building, your sewer line backs up…these all cause physical damage to your premises that then necessitate the closure of the business and triggers those coverages. Being shut down by executive order or government mandate are not perils that would trigger these coverages so the current predicament that you and everyone else finds themselves in would not be covered. However, the situation is evolving on a daily basis with proposed legislation to force insurers to cover these circumstances, or someone else filing a lawsuit challenging that airborne pathogens qualify as direct physical damage and thus could change the interpretation of the coverage. It's for these reasons that we can't say if you have coverage or not right now. As soon as something definitive comes down the pike, we will share it with you.
IL Dept of Commerce & Economic Opportunity
ACCION Loans (4/1 filing deadline for Grant program)
IL Dept of Employment Security (IDES) - Unemployment Filing Schedule
To break-up the congestion on the IDES website, IDES is asking people to observe the following schedule for filing online: Last Names starting with A through M - file on Sudnay, Tuesday and Thursdays. Last Names starting with N through Z - file on Monday, Wednesday and Fridays. Anyone can file on Saturday.
The Coronavirus Aid, Relief and Economic Security (CARES) Act contains provisions that are applicable to small business owners such as low-interest SBA loans. Here are some links to more information on the bill: CARES Act - What you Need to Know [Covington & Burling] | Historic Relief Package Approved [K & L Gates] | Loan Application Info & Instructions [AmTrust Financial] |