Businesses around the country are reopening or resuming semi-normal operations. They may realize that their insurance policies likely do not provide coverage for COVID-19 claims. Property policies typically require direct physical loss, CGL policies may have communicable disease exclusions like the ISO CG 21 32.
As a result, insureds may be seeking noninsurance risk management advice from agents. For example, the Big “I” Virtual University’s “Ask an Expert” service received the following question from an agent:
“We have several clients that are nonprofit private swimming pool clubs. As we begin to reopen after the pandemic, these organizations are looking to us for how best to reopen safely and how their insurance will respond. We know that their insurance will not respond to a COVID-19 related lawsuit, but how can we help with waivers and standard procedures that will give them a level of comfort that they can reopen?”
First of all, E&O experts recommend that agents should not opine about coverage for COVID-19 claims, but rather refer questions to the carrier(s). I wrote about that in this article.
Almost three years ago, I wrote about “The Danger of Being Too Helpful.” In this article, I provided a dozen examples of agents providing advice that likely go beyond the norm for an insurance agent (possibly resulting in a lack of E&O coverage if a claim or suit arises from the advice) or otherwise exceed the expertise of most agents and, as a result, heighten the E&O exposure. They also don’t serve the customer well if the advice provide isn’t appropriate.
In the example above, unless you have a license to practice law, you should probably not be assisting customers in drafting liability waivers. Unless you have a license to practice medicine, you should probably not be assisting customers in drafting procedures for minimizing COVID-19 exposures. Even seasoned risk management experts would want professional counsel in assisting a customer.
The CDC has advisory practices for various types of businesses and health exposures. For example, this page on their web site addresses “Healthy Swimming.” The customer of this agent can dig deeper on the CDC web site for advice and seek guidance from local health officials. For waivers, the customer should consult with a qualified attorney.
The hallmark of a good agent, especially those providing customer service, is a desire to be helpful to customers. However, exceeding one’s expertise is probably not being helpful and, in fact, can be dangerous to both the customer and the agency’s E&O policy.
Photo by cedarsx 
Bill Wilson
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Bill – Well said and a quick read to keep us on our toes!
Great to see you on the screen this week!
Be well, my friend!
Thanks. BTW, I will be doing two days of seminars in Vermont on September 24-25. I’m doing an all day program on my book on 9/24 and the next day I’m tentatively doing “Finding and Fixing Commercial Lines Coverage Gaps” and “Finding and Fixing Personal Lines Coverage Gaps.” I’m not positive about the schedule for 9/25.
If all goes according to the new schedule I’ll be seeing you in Portland, ME on 9/22.
Looking forward to it.
Bill
I certainly appreciate your dedicating your website to Don Malecki.
I miss him, his knowledge, his humor and most of all his friendship.
One of my most cherished memories is of our sitting on the floor about three feet in front of the
Preservation Hall Jazz Band in New Orleans. We were at an IRMI conference.
Unfortunately, that same night , Bill Clinton was elected president and I spent most of the night crying.
About the only question he didn’t help me with was if corn from a barge is dumped, released into the
Illinois River, is that pollution.
Not sure the question needs to be answered, but there still is an exposure.
I sincerely appreciate your work and always look forward to what you present.
Thank you.
My best,
Dave.
Don was one of a kind and part of a dying breed of insurance professionals who devote themselves to studying the past, present and future of insurance contracts. I have lots of fond memories of spending long weekends with Don, Greg Deimling, and John Eubank at Greg’s lake home in KY. The wives would sun bathe or boat and we would sit around a table for 3 days debating insurance policy issues, condo docs, contractual insurance requirements, and court cases. The ladies thought we were crazy. The PBR, merlot, Jack Daniels, and Coke helped.
Amen to not providing legal advice, such as a release or waiver!
Bill: Yesterday, I received a FAX from a church we insure. Their question was, if they start opening their services and a person who attended becomes infected with the virus, would their liability protect them if they, the church is sued? I forwarded the question to the insurance company and made no comment as to the existence of coverage. Later, I did review the forms and found that fungi and bacteria are specifically excluded but there was no mention of “virus”. I will still wait and let the insurance company answer the question.
Thanks for your continuing help. Bob Shipp
ISO has a communicable disease CGL endorsment CG 21 32. Absent that or a similar form, and unless they can make a case for SARS-CoV-2 being a “pollutant,” they are probably on the claim.
Interesting discussion, Bill. It brings up the idea that with Covid-19, it will be difficult to prove where anyone ‘caught’ it. Also, If CG 21 32 excludes coverage, it is a good bet that every renewal will have it as a listed form. The problem with risk management advice is there is not enough hard data available to make an intelligent decision. Once you get past social distancing and a mask, it’s at best a guess; only hind-sight will show what is going to work. Regarding the waivers, I once heard that no waiver is guaranteed to work, you are just giving your attorney ammunition. (I may have picked that up from the un-imitiable John Eubanks.)
All the Best to you and yours. It is going to be wild ride.
I’ve been trying to do some anecdotal surveys of agents to see what carriers are doing. It seems that everyone that doesn’t have a specific virus exclusion is adding one, some specific to this strain. I heard that one carrier that has a nice restaurant package is no longer accepting new business. Probably the best thing about a waiver is the E&O coverage for the drafter.