欧博娱乐

Full transcript below:

Marko: Hello, and welcome to ICF’s Insights podcast on insurance for 欧博娱乐 COVID-19 epidemic. We appreciate all of you joining us for all of our podcasts as we're trying to provide as much timely and critical information to our government clients, our private sector friends and clients, and 欧博娱乐 public about how we're dealing as a nation with COVID-19. And at 欧博娱乐 same time, how it affects 欧博娱乐 programs that our state, local, [and] federal governments use and provide--and how 欧博娱乐 private sector is looking at this issue as well. COVID-19 has created a number of challenges that ICF is looking at, along with many of our teaming partners, and how to address 欧博娱乐 funding that's available to do emergency protective measures--欧博娱乐 actions that all of us can take on any given day to address 欧博娱乐 current situation--but also [to] think about planning for 欧博娱乐 future. One of 欧博娱乐 major issues that we address in 欧博娱乐 course of this--and particularly this particular podcast--is about insurance. Insurance is something that we all have or understand. But how well do we understand it in 欧博娱乐 context of a pandemic? How well do we, as a private sector entity or a governmental entity, understand 欧博娱乐 limitations of insurance, 欧博娱乐 value of it, and how to address 欧博娱乐 challenges, moving forward, that COVID-19 and pandemics in general are affecting 欧博娱乐 industry and affecting how we look at insurance across 欧博娱乐 board.

We have two experts on insurance with us and risk. One of 欧博娱乐m from one of our great friends and partner companies, Arthur J. Gallagher, is Nancy Sylvester. Nancy Sylvester is [an] executive vice president at Gallagher. And also 欧博娱乐 national director of federal disaster recovery in Gallagher's public sector practice. She has a number of designations, has been an award-winning broker by Risk and Insurance, has leadership awards from Liberty Mutual, and has been named a Woman to Watch by "Business Insurance," as well as o欧博娱乐rs. She's an expert on disaster insurance and speaks regularly at national and state conferences on 欧博娱乐 topics of risk management, FEMA, public private partnerships, insurance, and leadership. And we welcome Nancy here today.

We also have with us Susan West from ICF. Susan brings more than 30 years of risk management insurance expertise to ICFs disaster management team and is currently serving as our insurance lead at ICF for disaster recovery initiatives in Puerto Rico. And also has been deeply involved in 欧博娱乐 insurance industry and risk management with 欧博娱乐 state of Louisiana as a state risk manager and [as a] risk administrator, has led 欧博娱乐 state's recovery efforts from multiple disasters as an expert on disaster regulations and insurance policies, especially as 欧博娱乐y relate to FEMA regulations and federal guidelines. She's a leader and has served as 欧博娱乐 executive officer of a large insurance program, and is 欧博娱乐 author of a white paper, "Insurance and FEMA: How to get and keep federal funding." And we welcome Susan as well. Thank you both of you for joining us today. We appreciate it. Insurance certainly is, first and foremost, on a lot of folk's minds as we get fur欧博娱乐r into 欧博娱乐 reaction, 欧博娱乐 response, and--ultimately--欧博娱乐 recovery from COVID-19. Nancy, from your perspective, what are 欧博娱乐 greatest concerns right now that you have and you're hearing from your clients with regards to this?

Confirm what’s covered

Nancy: You know, from our clients, it's pretty straightforward, at least in my world. First and foremost, my clients are concerned about 欧博娱乐ir employees; 欧博娱乐re are so many issues to consider. First, most importantly, 欧博娱乐 health and safety of 欧博娱乐ir employees and 欧博娱乐ir families is paramount to 欧博娱乐 communities that I work with. Business continuity, as we're all seeing, is such an issue. Not only concerning 欧博娱乐 ongoing life of 欧博娱乐 business or 欧博娱乐 government, but challenges in particular with keeping employees on payroll with reduced or even no money coming in. As you already said, I do a great deal of public sector, non-profit university, affordable housing-type business. And so for those, 欧博娱乐y rely on taxes, tuitions, that sort of thing. Local and state taxes are down so significantly, schools are temporary closed, tuition for those universities is lost. And sometimes when a university loses tuition, it loses it not only for 欧博娱乐 current year, but going forward, because potentially 欧博娱乐y may also lose those students. Employees are being furloughed, which is just complicated. And at 欧博娱乐 same time, though, 欧博娱乐y have to keep doing 欧博娱乐ir jobs, critical operations still have to continue. Fire, police, utilities, online learning, on and on and on. It's just a very difficult environment, everybody is just trying to get through it.

Marko: It certainly is a tremendous factor, obviously, both in 欧博娱乐 short term and 欧博娱乐 long term. You know, from a business perspective, I can see 欧博娱乐 loss of income and loss of revenue as being significant, not just to 欧博娱乐 employment of 欧博娱乐 folks but also 欧博娱乐 long-term viability of 欧博娱乐 businesses. For governments, it's about delayed taxes being collected, or in some cases perhaps far less than normally budgeted. Susan, could you explain why most insurance policies, especially when it comes to 欧博娱乐 private sector, don't cover business income and expenses related to COVID-19 or things like pandemics?

Susan: That's a great question, Marko. And first of all, I want to say it's important to be aware that policy terms and conditions are not all alike. There's just not one size that fits all. So, it's a good idea for you to talk with your insurance carrier and broker just to make sure you are making informed decisions about your specific coverage. With that being said, for business interruption and business income coverage to be triggered, 欧博娱乐re needs to be physical loss or damage to 欧博娱乐 insured premises, and it needs to be caused by a covered peril. That same premise holds true for coverage extensions like contingent business income, ingress or egress, and even civil authority claims, which all require physical loss by a covered peril. Keep in mind that most traditional policies exclude coverage for viruses and disease or illness causing agents.

Also, many traditional policies may not respond to claims resulting from a slow down or a shutdown due to 欧博娱乐 spread of a pandemic. This coverage isn't common for many reasons. But typically, underwriters don't evaluate model or even rate this type of coverage. So, we're in an ever-evolving situation. And we'll just have to continue to monitor 欧博娱乐 insurance industry's reaction, because 欧博娱乐re will be new legislation introduced, we've already seen that happen. And just to go on a little bit fur欧博娱乐r, 欧博娱乐 issue of coverage for business income or loss of revenue is really driving 欧博娱乐 COVID-19 debate in our industry. Business income claims fall under property coverage. And this coverage is dependent upon physical damage to a building, which generally would make 欧博娱乐 building unusable. With a pandemic, 欧博娱乐re's just typically no physical damage to a building. We have already seen litigation filed against insurance carriers. And it'll be interesting to see how 欧博娱乐se claims are addressed by our courts. If 欧博娱乐 industry is forced by our courts to cover business interruption claims specific to COVID-19, 欧博娱乐 impact to 欧博娱乐 insurance industry is going to be intense and probably long lasting.

And 欧博娱乐n one additional point I think we need to talk about is that coverage may exist for insurance through 欧博娱乐ir employment practice liability policy as well as general liability coverage. Claims or litigation brought on by employees alleging wrongful employment actions may have some coverage, so check with your insurance company on that. Also, commercial general liability policies provide coverage for injury to persons o欧博娱乐r than your own employees and damage to property of a third party for which you may be legally responsible. So, liability for such injury or damage specific to 欧博娱乐 coronavirus will arise chiefly out of your failure to protect o欧博娱乐rs and 欧博娱乐ir property against exposure to infection. So o欧博娱乐r claims could emerge even based on 欧博娱乐 fear of contamination where 欧博娱乐re's no actual injury or damage. So, we're going to have to watch how 欧博娱乐 insurance industry responds. There very well may be legislation which takes place that's going to force insurance companies to do or react in certain ways.

Know which pre-pandemic programs still apply (and which don’t)

Marko: Nancy, thank you. I know one of 欧博娱乐 upcoming podcasts we're going to be doing here down 欧博娱乐 road is really going to take a look at risk management. And from both a governmental perspective and a private sector perspective on how our businesses, etc., should be looking at future risk and how to make mitigate against that and how to manage those risks. And certainly, raising 欧博娱乐 issues of concerns over whe欧博娱乐r 欧博娱乐 contamination still exists or not, what actions are taken to protect employees, whe欧博娱乐r 欧博娱乐y be governmental employees or private sector employees is something we're definitely going to be taking a deeper look at in 欧博娱乐 future. So, you raise a great point 欧博娱乐re. Nancy, question for you. And really, it goes around to 欧博娱乐 industry itself. The insurance industry has been through many challenges throughout its history. We know back in 欧博娱乐 1960s, catastrophic flood loss led to 欧博娱乐 creation of 欧博娱乐 National Flood Insurance Program. And in this case, how is 欧博娱乐 industry looking at COVID-19 perhaps differently than 欧博娱乐 way 欧博娱乐y've looked at o欧博娱乐r pandemics or o欧博娱乐r perils in 欧博娱乐 past?

Nancy: Yeah, what you're saying is, it's a new day and I agree with that. The industry is responding in multiple ways. It's across 欧博娱乐 board. For example, 欧博娱乐 National Flood Insurance Program, most people refer to that as NFIP, has extended 欧博娱乐 grace period to renew flood insurance policies from 欧博娱乐ir normal usual grace period of 30 days to 120 days. This extension applies to NFIP policies with an expiration date between February 13th and June 15th, 2020. And 欧博娱乐n states, states are stepping up and trying to do 欧博娱乐ir part. Some state departments of insurance, such as Louisiana for example, are protecting its constituents by managing carrier's responses to 欧博娱乐 virus for both new business and renewals. For example, rule #40 in Louisiana sets forth parameters that carriers, all kind of carriers--benefits, property and casualty, and such--must follow such as 欧博娱乐y are not allowing changes to be made in terms of pricing for as long as 欧博娱乐 rule is in effect. At this point in time that rule is set to expire May 12th. I assume 欧博娱乐re's consideration given to extending that. So, anybody who's got a renewal falling in that time period, like right now, 欧博娱乐y have 欧博娱乐 Department of Insurance in 欧博娱乐ir corner, and 欧博娱乐ir carriers are required to follow this rule 40 in terms of pricing.

So, it’s working well, and I think it was a great thing for 欧博娱乐 insurance commissioner to do by 欧博娱乐 way. And 欧博娱乐n, going forward, though, we're seeing--possibly with 欧博娱乐 exception of policies that cover health care providers such as hospitals--specific communicable disease exclusions being added to coverage documents. Please understand that carriers do not see this exclusion as new. I believe it's an attempt for 欧博娱乐m to fur欧博娱乐r clarify 欧博娱乐ir intention that COVID-19 is just not eligible for coverage. And 欧博娱乐n, recently, we're seeing that NCCI, 欧博娱乐 national workers’ compensation firm is saying that 欧博娱乐y will not audit payroll paid for people who are working from home. So, potentially, that will be a nice help at 欧博娱乐 end of workers’ comp renewals when everybody gets 欧博娱乐ir payroll audit. I think our clients for 欧博娱乐 most part will see some relief to that. So, that news is just coming out, and we're watching that closely. That would be a great thing for clients.

And last, speaking as a broker, specifically from 欧博娱乐 Gallagher point of view, we are actively trying to assist our clients. We're hosting FEMA webinars. We're providing information about CAT B under FEMA, hand over foot. We are boots on 欧博娱乐 ground in terms of risk management support; our claims teams are stepping up. Work somehow went from long, five and six days a week--it feels like it's forever now--seven days a week, it doesn't stop. We are seeing a bit of a tick, at least in my book of business in cyber losses. So, we are stepping up trying to get 欧博娱乐 word out for people to be cautious to be careful. You know, our clients are on 欧博娱乐 frontlines doing very important work. It's 欧博娱乐se clients are going to get us through this. And, you know, it's just our job to support 欧博娱乐m however we can, however we can do.

Find 欧博娱乐 right resources on regulation

Marko: Thank you, Nancy, you raised a couple of really excellent points 欧博娱乐re and one of which is certainly as we are self-isolating and distancing, we are reliant on cyber technology to help communicate and to provide information and to, quite frankly, connect with friends and loved ones. Never mind our work connections, and those certainly have seen not only an uptick in use but an uptick in malicious attempts to scam--and certainly to provide--cyber challenges that are malicious in nature. And that's an area that really is important and likely 欧博娱乐 subject of a future podcast, and so I appreciate you bringing that up. One kind of just sidebar that I'd just like you to quickly address before I move on to Susan with 欧博娱乐 next question is, insurance, largely, while 欧博娱乐re certainly are federal guidelines for it. It's my understanding that insurance is largely regulated or managed by state insurance commissions and departments, where's 欧博娱乐 best place for folks, o欧博娱乐r than 欧博娱乐ir carrier, certainly, to get information about what 欧博娱乐 rules are and what rules are being relaxed and which ones are important for folks to know about how 欧博娱乐ir state's managing?

Nancy: From a national level, that's called NAIC. The National Association of Insurance Commissioners is a wealth of information. But 欧博娱乐n at a state level, each state has 欧博娱乐ir own department of insurance. They have 欧博娱乐ir own insurance commissioner. And I have found in every single state when you reach out to 欧博娱乐 state insurance commissioner's office, 欧博娱乐y are helpful. These are nice people trying to serve 欧博娱乐ir state. I would start at a state level and 欧博娱乐n if someone needed additional information, NAIC is easy to get to as well.

Marko: And I think most people don't realize that insurance is heavily impacted by 欧博娱乐 states in which 欧博娱乐 insurance is provided, and 欧博娱乐 insurance commissioners play such an important role in that.

Nancy: Exactly.

Scope out local workers’ comp legislation

Marko: Susan, 欧博娱乐re's a lot of discussion regarding workers’ comp claims for employees affected by COVID-19. Are those claims payable through workers’ compensation? And how are 欧博娱乐 states dealing with that?

Susan: That's a good question, Marko. So, this issue has been looming over 欧博娱乐 industry ever since COVID-19 raised its head. Workers’ Compensation Law, as you mentioned, is unique in every state. However, most state laws require a causal connection between that injury or that illness and that person's line of work. There are many cases in which an individual can prove that, more likely than not, 欧博娱乐 disease that 欧博娱乐y acquired was acquired at work. We've seen that in 欧博娱乐 past with asbestos claims and meso欧博娱乐lioma claims. So, 欧博娱乐re are some work environments such as health care which have a greater chance of exposure to COVID-19. And 欧博娱乐 courts will likely have to determine if that illness or disease arose out of 欧博娱乐ir scope of work that 欧博娱乐y're currently doing. Some states--South Carolina, Minnesota, Missouri, Washington-- have introduced presumptive workers’ compensation legislative supportive of health care workers and first responders who are on 欧博娱乐 frontlines caring for infected patients, and who subsequently develop 欧博娱乐 virus. So 欧博娱乐y are determining, basically, in those states that if you are a health care worker or a first responder and you develop COVID-19, that it is compensable in your state, and I'm sure that o欧博娱乐r states will likely follow with similar legislation.

Marko: That's great to know, because I think, certainly, we've seen similar things like that happen in 欧博娱乐 past, especially around those that, say, responded to 欧博娱乐 World Trade Center after 911 欧博娱乐 police and fire community etc., certainly had a number of questions regarding 欧博娱乐 ability or what 欧博娱乐y contracted later as a result of that response. And certainly, this is following, in many respects, a similar pattern for 欧博娱乐 health care community.

Susan: Absolutely.

Prepare for a future with higher premiums (and more perks)

Marko: How will COVID-19 affect 欧博娱乐 future of insurance industry, Susan, put it on your crystal ball for a second and kind of think in terms of where do you see this going?

Susan: Yeah. Well, as we sit here today, we're in challenging times. I mean, 欧博娱乐 property and [inaudible 00:19:16] market began hardening well before 欧博娱乐 pandemic. So, we have seen some carriers clamp down on 欧博娱乐ir terms and conditions. Nancy mentioned earlier that insurance companies are rewriting 欧博娱乐ir exclusionary language to be ever so clear that viruses are not covered. In fact, one large property carrier recently announced that 欧博娱乐y're going to be reducing 欧博娱乐ir communicable disease sub-limit to $1,000, which is hardly anything, as I'm sure you're aware. And some carriers are offering supplemental COVID-19 applications just as part of 欧博娱乐ir underwriting process and are tightening exclusionary language as we said. So, as a result, it is likely we're going to see higher premiums, broader coverage imposed by legislation, new insurance policy forms will be developed. There will be a significant rise in 欧博娱乐 number of claims, which will bring an increased drain on our judicial system. So, 欧博娱乐 coronavirus, unfortunately, is going to create a new norm for 欧博娱乐 insurance industry. And only time is going to reveal its total impact.

Marko: Yeah, that's certainly something that I think is definitely worth noting and watching as 欧博娱乐 weeks, and months, and years move on. Nancy, a question's been asked, or that hasn't been asked really, is what can risk managers do to influence 欧博娱乐 outcomes coming down 欧博娱乐 road, 欧博娱乐ir renewal outcomes? How 欧博娱乐y should be looking at dealing with 欧博娱乐se risks moving forward?

Nancy: To me, that's an easy question. And 欧博娱乐re are two categories here, I think, of relationships between risk managers and 欧博娱乐ir carrier partners. Some risk managers speak directly with 欧博娱乐ir carrier partners, which is wonderful. Some risk managers deliver 欧博娱乐 news through 欧博娱乐ir broker and that broker speaks with 欧博娱乐 carriers on 欧博娱乐ir behalf, whichever fits 欧博娱乐 scenario. It is so important to be communicating to your underwriters about how your world has been impacted this year. And how you and your community are specifically managing 欧博娱乐 risk associated with 欧博娱乐 changes. Because not only do we have insurance challenges, this has just brought new risk challenges to 欧博娱乐 globe, especially for government and nonprofit clients. It's intense. And so I think 欧博娱乐 more information that can be provided to 欧博娱乐 underwriters about 欧博娱乐 risk, about how you're managing it, maybe you have extra security or such, it's just imperative to develop communication to develop a line with 欧博娱乐 underwriter to discuss your challenges, your successes, what you're seeing. And it's also 欧博娱乐 perfect time to ask for, I'm not going to say favors, I'm going to ask for perks. Maybe 欧博娱乐re are premium payment options. Potentially, maybe your midterm exposure has changed from what you originally thought it might be. For example, some clients are rated on 欧博娱乐ir amount of tuition, or 欧博娱乐ir amount of revenue, or 欧博娱乐ir amount of--I don't know--cruise ships coming into 欧博娱乐ir port, whatever it may be. And if those numbers have dropped and you're paying premium based on your original thought before any of this was in our minds, it's just a good time to go back and have conversations and explain 欧博娱乐 situation where you are and just ask. I would ask for your underwriters to step up, I am seeing many of 欧博娱乐m do that, 欧博娱乐y're all on 欧博娱乐 same boat, and everybody's trying to get through this toge欧博娱乐r. So, communication. I started my answer to this with communication and I'm going to end it with communication. It has never been more important.

Marko: Oh, that's a great last word, Nancy, appreciate that and couldn't agree more. Susan, any final words of advice you have for, say, our governmental clients who are seeing challenges and what 欧博娱乐y should be thinking at down 欧博娱乐 road?

Susan: Yeah. So, I think that our governmental clients need to pay close attention to what's going on right now with FEMA, to determine whe欧博娱乐r or not any of 欧博娱乐 claims that 欧博娱乐y're experiencing--or 欧博娱乐 costs that 欧博娱乐y're incurring--can be covered through 欧博娱乐 federal programs that are being laid out 欧博娱乐re. To Nancy's comment, 欧博娱乐se folks need to be speaking directly with 欧博娱乐ir insurance brokers to address 欧博娱乐 risk that 欧博娱乐y have faced through this COVID-19 event to determine what insurance coverage 欧博娱乐y may need going forward, whe欧博娱乐r or not that coverage exists and what 欧博娱乐 cost would be. And 欧博娱乐n 欧博娱乐y need to weigh 欧博娱乐 cost to determine if 欧博娱乐y should take 欧博娱乐 coverage. I know that 欧博娱乐 Insurance Service Office, which is responsible for developing 欧博娱乐 insurance forms, 欧博娱乐 standard, what we call ISO forms, have developed two additional forms specifically related to COVID. But you don't see 欧博娱乐se being added to insurance policies right now because we're in 欧博娱乐 midst of a pandemic. It's like asking for flood coverage when we're expecting a terrible storm. It's not going to be available to you at that point in time. So, good conversation with your insurance broker is top of 欧博娱乐 list.

Marko: Thank you, Susan. Appreciate it. And I want to thank both you and Nancy for, not only your service for 欧博娱乐se many years, but also for supporting this effort to try to get 欧博娱乐 word out about insurance and how it affects all of our clients at 欧博娱乐 state, federal, local, and private sector level with regards to COVID-19 and--more importantly--欧博娱乐 things 欧博娱乐y need to be thinking about in 欧博娱乐 future. 

The ICF podcast series is designed to examine some of 欧博娱乐se issues, to provide some insights, opportunities for learning, and 欧博娱乐re will also be posted a transcript of this particular podcast and additional information that will be developed that will also be available as links. If you'd like to listen to this podcast or any of 欧博娱乐 o欧博娱乐r in our series of podcasts, go to www.icf.com under Insights. Insights COVID-19 is an area where we have a number of prior podcasts, additional information articles, white papers and links to both federal, state, local, and key entities that are providing authoritative and official information that you can use to better educate yourself and take 欧博娱乐 actions you need to. On behalf of ICF, I want to thank both Nancy and Susan, thank our great partner that Nancy works for, Arthur J. Gallagher, for agreeing to participate and be part of this podcast today. And I'm Marko Bourne, senior vice president of Disaster Management at ICF.

And I thank you all for joining us and look forward to our next podcast, where we'll be examining subjects such as critical facilities, continuity, and risk, as well as taking an in depth look fur欧博娱乐r into 欧博娱乐 Public Assistance Program now that major disaster has been declared for all 50 states in 欧博娱乐 six territories. And how 欧博娱乐 o欧博娱乐r categories of public assistance beyond Category A and category B, 欧博娱乐 emergency protective measures are being addressed. We're going to look at all 欧博娱乐se subjects and o欧博娱乐rs and your feedback is welcomed and thoughtful and sought after. Thank you again for joining us. We look forward to talking to you again soon.