“COVID-19 has affected three phases of property and casualty insurance – one being property coverage, the second being workers’ compensation coverage, and the third being the market position on COVID-19 at the ‘future,’ said Peter Jacavone, senior vice president, assistant sales manager and construction practice group leader at Starkweather & Shepley.
The insurance market was already facing challenges before the pandemic, and those challenges have only grown, according to the report.
“Carriers have added broader exclusions to their policies to show that COVID-19 is an excluded cause of loss in the future,” Jacavone said. “For example, most carriers on profitable customers are always looking for a bigger premium increase on good accounts. It’s very similar to what’s happening in the housing market, with inflated prices all the way.
Cyber risk has also increased thanks to a largely remote workforce.
“We are seeing more demanding requirements from carriers to offer cybersecurity coverage,” Jacavone said. “An example would be multi-factor authentication for all enterprise users. I think the insurance market will take time to rebound in the future.
P&C has seen some of the biggest shifts in the trading space during COVID-19, according to the report. With many businesses due to close or drastically reduce revenue, the number of claims for coverage such as business interruption has increased. Many carriers reject claims under this clause, saying there was no direct physical harm to businesses for interrupting their revenue and production, according to the report.
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In the area of general liability, this has resulted in the addition of exclusions for communicable diseases, which address the spike in claims by employees and third parties contracting COVID-19 on an insured’s property. . Because of these exclusions, many policyholders are forced to spend out of pocket to fight the claims against them – a costly and ineffective use of policyholder earnings, Starkweather & Shepley said.
With much of the workforce still working remotely, having a risk control plan in place can help across all insurance sectors, according to the report.
“We have seen many employers not equipped to meet the challenges that COVID-19 has brought to the forefront of the health and safety community,” said Jonathan Cuneo, loss control specialist at Starkweather & Shepley. “One of the major trending issues we saw during the COVID-19 outbreak was that companies were struggling to manage COVID-19 outbreaks in the workplace due to lack of safety programs. .
“Having a strong and clear safety program allows companies to define their expectations for work practices and behaviors. Companies must specify [to] explain to employees how they intend to handle adverse situations, while ensuring that the message is clear. The health and safety of employees is at the forefront of their operations, regardless of unexpected adversities. »