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COVID-19 FAQs: Managing risk

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Business continuity

Who can help create a business continuity plan (BCP), review a BCP or provide a template?

The Federal Emergency Management Agency (FEMA) template provides guidance to assist organizations in developing a Pandemic Influenza Continuity of Operations Plan or, if the organization already has a continuity plan, a Pandemic Influenza Annex. General guidance and sample information is provided for reference and organizations are encouraged to tailor Pandemic Influenza Continuity Plans to meet specific organizational needs and requirements.

With regard to roles and responsibilities, companies should consider implementing an incident management system (IMS) designed to identify specific entity roles, titles and responsibilities for each business function performed.

Learn more: Willis Towers Watson thought leadership around business continuity

Coverage – Policy reviews

Who will perform policy reviews to determine coverage of COVID-19?

At Willis Towers Watson, our service teams’ coverage analysis about COVID-19 is managed with guidance from our claims and subject matter experts. Coverage determination for COVID-19 is complicated and highly specific to the terms and conditions of each client’s insurance policies. Consistent interpretation and advice are based upon the policy terms, provisions, conditions, limitations and exclusions. Thus, we have assigned resources for commentary on each product line.

Furthermore, be aware that if coverage was recently renewed, the prior year’s policy should also be provided since COVID-19 has been ongoing and we need to review both the renewing and expiring policies.

Insurance – Business interruption

Does business interruption coverage generally extend to business disruption due to a national pandemic?

Business interruption insurance is intended to make the insured whole by returning the insured to the position had the loss not occurred. For example, consider a restaurant with net revenue of $100,000/month that burns to the ground and takes three months to rebuild. A business interruption policy is designed to protect the insured for the cost of rebuilding the restaurant plus $300,000 (the three-months of revenue it would have earned had the “loss” not occurred.)

The pivotal issue with a pandemic such as COVID-19 is whether financial losses resulting from macro- and micro-economic impact of the pandemic — absent physical damage like a fire or similar — constitutes a covered “loss” under a property policy.

For most insureds there may be no physical loss at an insured location. Most of the “business interruption” at issue is from the devastating effect on the economy and associated lost revenue from a lack of customers or the inability to open operations. Some businesses are closed due to an order from a civil authority affecting those businesses like casinos and restaurants. Some businesses are closed or significantly impacted by the lack of business/leisure activity like airlines, and hospitality.

As it relates directly to pure financial loss or financial loss due to a civil authority order prohibiting or impairing operations, the insurers’ positions are typically expressed as: “The property insurance industry does not view the diminution of income due to the lack of customer demand as a peril covered under a property policy.” The insurers view financial impact from a pandemic as a marketplace event, not an insured event.

As to financial losses incurred when a civil authority prohibits access to certain businesses, the insurers’ position is that coverage for civil authority requires that the civil authority order be the direct result of a covered event. Insurers point to various governmental orders which indicate that the purpose of the mandate is to “protect the health and well-being of residents, to create social distancing, and minimize contact in an effort to limit community spread of COVID-19/novel Coronavirus.” As such, the insurers’ position appears to be that government mandates shuttering businesses and advocating social distancing are for the health, safety and welfare of the public and not caused by a covered event.

Contrarily, insureds may contend that it is only because of the existence of the virus and its presumed presence in the workplace (due to people) that the civil authority orders were entered and it is that type of physical damage to property that is the underpinning for the orders.

The resolution of this tug of war regarding civil authority coverage likely will take years to resolve in courts. As a best practice, if there is any question as to whether to submit a claim or not, submitting a claim (absent the presence, for example, of an express exclusion for virus or disease), is prudent.

Insurance – Workers compensation

For workers compensation, what is the difference between coverage and compensability?

“Coverage” and “compensability” have distinctly different meanings but are often confused or misunderstood. The “coverage” provided by a workers compensation policy is designed to pay benefits due based on the applicable state statute. “Compensability” determines whether workers compensation benefits are due based on provision contained in the applicable state statute.

If the employee’s claim is compensable (due benefits) based on the statue then the workers compensation policy “coverage” will be triggered. As such, individual policy wording does not determine compensability; the statute does. It is therefore important to analyze statutes individually.

Do not confuse coverage with compensable. Whether a COVID-19 claim is compensable or not will be adjusted based on state statute and case law, not the wording contained in the workers compensation policy.

So, compensable means benefits are due and coverage means there is a policy in force that will pay these benefits.

What are the current best practices for workers compensation claims related to COVID-19 and claims filed to date?

Workers compensation – three considerations

  1. If an employee reports an injury or illness as work related, report it immediately to your workers compensation carrier or third-party claim administrator. Follow standard workers compensation reporting protocols and file the claim immediately. Allow the claim staff to conduct a thorough investigation to determine whether benefits are due based on the facts and applicable state statute.
  2. Consider reporting the matter to other potential sources of medical care and benefits that may be due the employee if their workers compensation benefits are denied. This step expedites the process in case of denial (i.e. treating this as nonoccupational until a formal decision on the workers compensation claim is determined).
  3. Employees may allege mental anguish, psychological issues or post-traumatic stress disorder associated with contracting COVID-19 or exposure to it. Consider reinforcing to employees the availability of your Employee Assistance Program (EAP) if available and where appropriate.

Workers compensation – an overview

Workers compensation claims in the U.S. are governed by state law. Under many state statutes, COVID-19 claims are likely to be classified as "occupational disease" claims v. "accident" claims.

Triggers for coverage under state occupational disease statutes, which extend workers compensation benefits to employees who allege a direct workplace connection to their disease, range from expansive rules, such as those that provide coverage when the origin of the risk is simply connected with employment to narrow rules such as specific exclusions for diseases common to the general population.

As a general rule, the probability of a workplace outbreak of a communicable disease such as COVID-19 being covered by workers compensation increases if several factors are present:

  1. An elevated risk of contracting the disease associated with the type of employment (risk inherent in the occupation). Based on a March 9, 2020 communication from OSHA (see below), each state will make this association based on their respective statutes.
  2. How easily identifiable the transmission and the transmitter of the disease may be in relation to a specific point in time. Can the exposure of COVID-19 be identified to have taken place in the workplace without question?
  3. How identifiable the disease's symptoms are with a specific medical condition ("prevailing factor"). COVID-19 has a unique genetic marker, so proving the relationship between the injury and the disease is not perceived as an obstacle.
  4. The breadth of state statutes and case precedent.

We cannot be sure at this time how each state will determine the correlation between occupation and exposure risk. As temporary guidance, under an OSHA communication released March 9, 2020, workers fall into one of the following four risk categories, with the majority of workers being in the “medium” or “lower risk” groups:

  • Very High Exposure Risk: High potential for exposure to known or suspected sources of COVID-19 during specific medical, postmortem, or lab procedures (e.g., doctors, nurses, and lab personnel)
  • High Exposure Risk: High potential for exposure to known or suspected sources of COVID-19 (e.g., healthcare delivery and support staff such as those who must enter patients’ rooms, and medical transport workers).
  • Medium Exposure Risk: Require frequent or close contact with (i.e., within six feet of) people who may be infected with COVID-19 but who are not known or suspected COVID-19 patients (e.g., those with frequent contact with international travelers).
  • Lower Exposure Risk (Caution): Those who do not require contact with people known to be, or suspected of being, infected with COVID-19 “nor frequent close contact with (i.e., within six feet of) the general public.”

Workers compensation is no fault insurance. In certain circumstances, the injured employee may file an employers liability or "Part B" claim alleging potential negligence on the part of the employer. Generally, the claimant must prove:

  1. Employer has a legal duty to protect employee from undue harm or injury
  2. Employer's act or omission breached that duty
  3. Employee was injured as a direct result of the breach of duty
  4. Employee sustained damages resulting from the injury

Until potential COVID-19 claims begin to surface and are reported to carriers, it is difficult to predict how statutes will be interpreted. In addition, new legislation may have impact, such as proposed bills to shift costs associated with widespread COVID-19 illnesses. As exposure points increase claimants likely will have difficulty establishing the origin of their disease and the required direct causal connection to the workplace.

If you receive a complaint from an employee:

Workers compensation statutes contain dispute resolution processes and will vary by jurisdiction. Refer employee to the state office that is responsible for adjudicating disputes as necessary.

It is foreseeable that as COVID-19 exposure increases and the number of impacted employees rises, plaintiff’s attorneys will be creative and aggressive. Watch for new legal theories designed to push recovery envelopes.

The critical take-away: If an employee says it is work related, report it and allow the carrier or third-party administrator to investigate and decide on compensability.

Is COVID-19 considered an ordinary disease? Do you have a list of states whose workers compensation coverage includes ordinary disease?

Workers compensation claims in the U.S. are governed by state law. Under many state statutes, COVID-19 claims are likely to be classified as “occupational disease” claims v. “accident” claims. Triggers for coverage under state occupational disease statutes, which extend workers compensation benefits to employees who allege a direct workplace connection to their disease, can range from expansive to narrow.

If an employee reports an injury or illness as work related, an employer should report it immediately to their workers compensation carrier or third-party claim administrator. Employers should follow standard workers compensation reporting protocols and file the claim immediately. Allow claim staff to conduct a thorough investigation to determine whether benefits are due based on the facts and applicable state statute.

How would employees qualify for workers compensation should they contract the virus?

As a best practice, the employer should submit factual information that includes the employee’s job duties, work location over the three week period prior to diagnosis, history of travel during that three week period, date of initial symptoms, known points of contact with infected individuals and physician’s notes and diagnosis.

There is a duty to cooperate with investigation of claims under most insurance policies. It is advisable to cooperate with health departments, government agencies, insurance company adjusters or seeking legal counsel.

How will the COVID-19 pandemic impact an employer’s existing backlog of workers compensation claims?

Learn more: The impact of COVID-19 on existing workers compensation claims

Insurance – Other

Aside from workers compensation, what other type of policies may possibly respond to COVID-19?

Many property and casualty (P&C) lines could be impacted directly or indirectly:

  • Property and business interruption
  • Event cancellation
  • Trade credit
  • Environmental
  • Workers compensation
  • Liability — general liability, auto, umbrella
  • Employment practices liability insurance (EPLI) — massive employee actions are occurring
  • Directors’ and officers’ (D&O) — financial market turmoil
  • Cyber — remote working etc.
  • Healthcare — malpractice etc.
  • Marine — ports and terminals, cruise lines etc.
  • Aviation

COVID-19 may not be a covered event. Coverage issues are complicated and highly dependent on an insured’s specific policy language. Expert analysis is required.

Are physicians covered under the med mal policy if they offer telemedicine services to patients provided that they are following state laws in which the patient is located?

Policies are always governed by their exact wording and circumstances. Typically, telemedicine is not specifically excluded, but this is no guarantee of coverage. Organizations should notify underwriters of the decision to practice telemedicine, particularly if telehealth is a new service since the last underwriting submission.

It is also important to review territory limitations that could impact coverage. Some policies (particularly out of London) limit coverage to “your facilities” or “scheduled locations.”

What should higher education organizations consider when determining if allied healthcare students may attend practicum at facilities exposed to COVID-19 or treat COVID-19 patients?

In the unprecedented surge of patients, hospitals may rely on nursing students, medical schools, residents and other para professionals in training to help deliver care and services. Academic medical centers may want to pull students out of practicums while students may want to stay and assist.

Practicums are like work study programs, providing students experience in delivering patient care and teaming them up with licensed professionals. Students are typically unpaid but “school/practicum” agreements normally require a supervisor (employees) from the academic center or school on site during practicums. Some schools provide coverages; others have students obtain their own. Some students may have individual health coverage in addition to professional insurance.

Permitting students to remain in practicums may impact exposure for both malpractice and workers compensation, among other angles. Students are not licensed and are neither employees nor hospital volunteers. While some states and cities may have relaxed immunities for these circumstances, this is not universal and such exposures must be considered.


  • Reviewing agreements closely especially insurance and indemnification language
  • Reviewing how governmental or other regulations may provide immunities
  • Reach out to the person that signed or coordinated the practicum agreements at participating locations to understand how they are addressing “off” practicum student usage — those activities not sanctioned by the school sponsored arrangements

Coverage – Other

Could you discuss the new ISO advisory endorsements on coronavirus? How does that work? Is that only for new policies where policyholder pays for that coverage?

The ISO endorsements are only as good as the insurers who agree to issue them. ISO is a trade organization comprised of numerous insurers and ISO does prepare standardized insurance forms for all lines. The new forms are attempts to provide wording to provide some coverage for pandemic. Presently, we have not heard of any that have issued coverage on these endorsements. If they are issued there will, of course, be appropriate premium for the risk that the forms are addressing.

Are we getting any extension on renewals?

We are finding insurers are considering extensions on a case-by-case basis. Where there are extenuating circumstances beyond what all companies are facing, we find some insurers are willing to provide limited extensions, although in a few industries there may be less desire to extend.

What are other forms of collateral that you are seeing other than LoC or Cash?

Prompted by the Covid-19 outbreak and subsequent threat of considerable recession, credit risk officers have taken a more thorough look at their clients, distressed industries and the lenders banks who support the LOC's. In some cases we've seen more conservative posture as it relates to extending paid loss credits, for distressed risk or business classes, but across our portfolio, which is reflective of many industries, we're not seeing any wholesale movement away from historical norms.

The market is still supporting the same security forms including LOC, Cash, Surety, and a Trust. Certain carriers will accept up to 50% of their collateral requirement be posted in surety, and we have not seen that position eroded. In addition to these forms of security, Willis Towers Watson has partnered with a hedge fund to create a Letter of Credit facility. This facility extends letter of credit to distressed businesses to securitize different obligations and financial exposures - insurance based or otherwise. The provided off-balance sheet funds leverage the financial strength of the hedge fund and create LOC capacity in a time of need. Lastly, the facility accepts many different asset classes (e.g. stock, real property, equipment, etc.) to cross-collateralize the letters of credit. The facility is available to both Willis Towers Watson clients and those who use other brokers to place their casualty program.

Coverage – Business Interruption

Would loss of product or sale be covered due to Government/ Civil Authority closure of restaurants and bars throughout the country?

It could be covered if there was an interruption of power for longer than the waiting period for service interruption coverage. The Insurer could take the position that this is garden variety spoilage issue and not covered.

What is the Force Majeure clause in insurance contracts?

Insurance contracts generally do not contain Force Majeure clauses. A force majeure clause is generally found in contracts and is the provision which allows one party to the contract to avoid performance due to impossibility due to act of god. While a hurricane may be a Force Majeure that allows a company to avoid complying with a contract, coverage exists due to hurricane being a covered loss, not because of a Force Majeure issue.

Will the Government declaring a National emergency increase coverage from lost customers due to Coronavirus?

Coverage is going to be determined based upon the terms and provisions of each policy and if coverage is triggered than the provable business interruption will be based upon the period of restoration and loss during that period (and any extended period of indemnity). Answering this question will depend upon the specific facts of any covered event.

Would the cancellation of elective, profitable procedures, as a result of federal guidance qualify as Business Interruption?

This depends upon whether the insurer accepts civil authority orders as triggering coverage. There are arguments on both sides. Many insurance company claim people have stated that they will not honor claims for income loss due to the macro/micro effects of a pandemic as they do not constitute in and of themselves direct physical loss or damage.

If someone at a building down the block from my building is infected with Coronavirus and the government orders nearby buildings to be closed, does "Civil Authority" apply?

This depends upon whether the insurer accepts civil authority orders as triggering coverage. There are arguments on both sides. Many insurance company claim people have stated that they will not honor claims for income loss due to the macro/micro effects of a pandemic as they do not constitute in and of themselves direct physical loss or damage.

Insurers are saying that the Civil Authority order is not the direct result of a covered occurrence but is due to the concern to contain Covid 19 and for the health, safety and welfare of the public.

If you don't put your insurance carrier on notice of a potential claim now, are you jeopardizing a claim should the courts or public policy deciding there is coverage?

There are in many policies suit limitations provisions that provide that no suit in law or equity may be brought within (1 year, 2 years) from the date of loss. One may not have a claim if one waits years to see how the courts will rule and then submit the claim. That might be time barred. But if one submits the claim and gets denied, a subsequent lawsuit subsequent can argue that it is not based upon the policy (and time barred) but is based upon a wrongful denial (we do not practice law at WTW and suggest one speaks to outside counsel on this issue).

Is there coverage under property policy for loss of profit? Do business interruption losses have to be triggered by a physical property loss at a location?

Yes, physical damage is required and direct contact with Covid-19 or having a "positive" tested person at an insured location could trigger direct physical loss and then time element.

Is there a possibility that "decontamination" costs to the building could be considered property damage with Business Interruption during that decontamination period?

Yes, physical damage is required and direct contact with Covid-19 or having a "positive" tested person at an insured location could trigger direct physical loss and then time element. First you have to have the direct contact or presence, and then decontamination costs may be covered.

Have you seen any policies where the Civil Authority coverage is NOT sub limited?

Yes, but it's an exception, not the norm. Generally insurers have a sublimit apply, subject to a maximum number of days and in some cases, there is also a waiting period provision.

Coverage – Workers’ Compensation

Any thoughts if a company is Self-Insured for Workers’ Compensation?

We recommend confirming that your claim staff or claim administrator is utilizing their most experienced staff member(s) on COVID-19 claims. If the claim adjuster handles claims in multiple states, confirm they are well versed in the different state statutes. May also consider engaging an experienced workers compensation attorney to oversee the management of COVID-19 claims to assure consistency, quality of the investigation and proper application of each state's Workers Compensation statute.

You should also confirm that any internal procedures are in place to manage the interface with workers’ compensation claims and other potential sources of other benefits, such as: STD, LTD, CARES Act, Health Benefits, Unemployment Compensation, and Employee Assistance programs.

If I have employees working from home and they get injured at home during working hours, would this be considered a workers' compensation injury?

It depends on the facts and applicable state's Workers’ Compensation statute. Each incident is different and each state is different in terms of what is and is not compensable. So, if an employee alleges it is work related, report it immediately and allow your claim administrator to investigate and make the decision.

Would furloughed employees affect premiums for workers compensation or any other coverage?

There are a lot of uncertainties about coverage application given the unique furlough packages that are being extended. Historically furloughed employees were not commonly covered by workers’ compensation laws as they were not acting on behalf of their employer, or working in any professional capacity. However, those lines have been blurred with repurposed employees doing different jobs at home. We expect that if an employee is furloughed in the conventional manner and they're not actively contributing to their employers, their associated payroll will not be counted towards establishing workers’ compensation premium. In the contrary, if an employee is repurposed and working in a limited capacity for their employer, they would indeed be covered by workers’ compensation and all furloughed payroll would need to be reported.

Can you provide an example / scenario of how workers compensation rates may be impacted / increased and what your recommendations are for working with our Broker?

Workers compensation claims emanating from Covid-19 are currently projected to be within a magnitude that could be absorbed by the industry without materially impacting rates. However, the results of Covid-19 could be a considerable economic recession. Any decrease in exposure puts upward pressure on rate, and with considerable growth of medical expenses, the industry will need to continue to figure out how to fund for costly work related injuries with a smaller exposure basis.

Differentiating your risk will become increasingly important. That should come in several different forms including:

  • Building carrier relationships – Consider maintaining a strong relationship with your carrier, but you should have a relationship with a secondary carrier as appropriate.
  • Analytics - Utilize analytics to present factual insights that cast positive light on your risk. Underwriters need help building a story they can sell to their stakeholders on why your risk deserves to be priced differently than their book / pricing model.
  • Submission - Underwriters are strapped for time. Build a best in class submission so it is easier to work through your account and allows you to quickly secure terms that allow you to make informed decisions that are not last minute.

Coverage – General liability

How would the temporary closing of locations affect property, GL or other coverages? Should coverage be adjusted if we believe locations will be closed for several months or more?

A temporarily closed location would not appear to result in increased risk to the underwriter. As long as normal safety systems and procedures are maintained, it could reduce many types of loss. For example, the absence of foot traffic seemingly eliminates many slip and falls. Communication with your underwriter would likely be beneficial, as it would tend to alleviate concerns.

Temporary closing most likely should not affect coverage as many policies do not include vacancy clauses. Policy should be reviewed, however, in case there is a 30 or 60 day vacancy clause. Ensure that all safety features (sprinklers, alarms, security) maintained and might be beneficial to advise underwriters of property status.

Please speak directly with your WTW broker for adjustments to coverage if long term closures take place.

Is there an Employer Liability exclusion for workers at home? What about for workers that must continue working?

Typically, there's no EL exclusion applicable to working from home. If you believe that your policy contains one, please contact us immediately. Workers, who must continue working, generally because they are essential employees, would not normally be excluded for injury. Insureds will want to take care to protect their health, especially in the presence of a known COVID exposure, to avoid the effects of the exclusion for bodily injury intentionally caused or aggravated by you.

While the virus may not be manmade, the resulting shut down of states was manmade. Would that fit into the crisis management endorsement?

Crisis management endorsements are ordinarily found in the umbrella. While there is reference to man-made events, coverage is phrased as follows under another’s umbrella: "Crisis Management Event will include, without limitation, man-made disasters such as ..." Other forms, such as Chubb's umbrella, include "injuries from contamination of food, drink or pharmaceuticals if covered under this policy." We would evaluate the triggering 'occurrence' under the wording of the policy in question, based on the facts of the claim and applicable law.

Coverage – Environmental

If we had employees test positive and we decide to do a deep cleaning of each workspace office where employees were tested positive, do we have to test the surfaces to show any signs of COVID in order to be covered?

It depends on the Policy language, and how the carrier provides coverage for viruses. Assuming coverage is provided via standalone insuring agreement (i.e., Disinfection Event Expense coverage), the definition of Disinfection Event requires that the Insured report COVID-19 to a local, state or federal governmental or healthcare oversight agency. The Disinfection Expenses are reasonable fees and costs to clean and disinfect a covered property after a Disinfection Event (sometimes within a certain number of days). With this type of policy language - an Insured would need to report to the appropriate agency to trigger coverage. If Policy is silent as respects virus, or if virus is added within the definition of Pollution Condition, the Insured would have to demonstrate there was a release of COVID-19 at the covered location; and the scope of cleanup would be dictated by environmental law, or in absence of environmental law, as recommended by an environmental professional. Notice to the carrier is critically important - as some of these policies have very short time period to provide notice... as little as 10 days.

Would a claim related to clean up be one claim per location or one claim for multiple sites across the US?

How a carrier determines number of claims is going to be very fact specific. For instance, if an Insured's employee goes between different locations and subsequently tests positive - there would be a strong argument that this should be considered one claim. However, if an Insured has multiple locations, in different states, with different COVID-19 "pollution conditions" happening at different periods of time - that might be interpreted differently.

Whether Covid 19 is one or multiple occurrences will be uniquely decided by the definition of "occurrence" in each policy.


Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates.

COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.