Communicable disease rider

A communicable disease rider is also called infectious disease insurance. It expands an insurance policy’s scope of coverage to include losses caused by infectious diseases. It may provide blanket coverage for pandemics and other outbreaks, or provide coverage only for a specific disease like COVID-19 or Ebola.

To get coverage for business interruptions, liability lawsuits, or property damage due to infectious disease, some providers may let you add a communicable disease rider to your insurance policy when you purchase or renew the policy. It may be difficult or even impossible to add the rider to an active policy.

Insureon's partners do not offer this rider, but you may be able to find it through other carriers.

While availability is limited, communicable disease riders sometimes attach to:

As a business interruption insurance rider, communicable disease coverage can provide compensation if your business is forced to close due to disease. If the policy includes contingent business interruption coverage, the rider can also cover revenue lost due to supply chain interruptions during an outbreak.

However, keep in mind that business interruption insurance is intended to protect commercial property owners from losses, and typically offered as part of a commercial property insurance policy.

Even with infectious disease insurance coverage, you might be denied claims for losses not linked directly to property damage.

Common limitations:

• Many policies still require physical damage to trigger coverage
• Shutdowns due solely to government orders are usually excluded
• You may need documentation proving the disease was present

A communicable disease rider can expand the special event coverage included in some general liability policies. With this rider, you may be entitled to compensation for events canceled due to disease outbreaks.

Common limitations:

• Coverage may only apply if you were proven negligent
• Many carriers exclude communicable disease claims entirely
• Claims are difficult to prove and defend

As a commercial property insurance rider, communicable disease coverage includes the cost of testing, removing, discarding, and replacing property at your business after an outbreak of contagious disease. It might also take care of public relations expenses when an outbreak hits your business location.

Common limitations:

• Often restricted to specific diseases listed by the carrier
• Coverage may only apply once contamination is verified
• Policy limits for cleanup are usually low

Certain small businesses are more likely to benefit from a communicable disease rider—especially those with frequent in-person interactions. Here are a few examples to make the coverage easier to understand:

Restaurant with a confirmed illness
An employee tests positive for a highly contagious virus. The health department requires the restaurant to close for 48 hours for cleaning.

Potential coverage: Cleaning costs and short-term lost income (if included in the rider).

Gym with customer transmission claims
A member alleges they contracted a communicable disease at your facility and files a lawsuit.

Potential coverage: Legal defense costs, if your rider and GL policy allow liability coverage.

Retail shop needing disinfection
A customer becomes ill on-site and vomits. You must hire a professional service to sanitize the store before reopening.

Potential coverage: Decontamination and cleanup costs.

Hair salon with exposure concerns
A stylist tests positive for a communicable disease, and several clients may have been exposed during appointments. Local health authorities require the salon to close temporarily for deep cleaning.

Potential coverage: Cleaning and disinfecting costs, and possibly lost income.

Other types of small businesses that frequently interact with the public may also want to consider a communicable disease rider. This includes medical and wellness clinics, childcare providers, cleaning services businesses, and cafes or bars—any operation where exposure risk is higher and temporary closures could impact revenue.

Insurance providers typically only accept business interruption or commercial property insurance claims if you can provide evidence of direct physical damage.

However, some infectious disease riders let your business make claims for incidents without this kind of evidence.

To make a communicable disease insurance claim, your provider may ask for evidence such as a positive test result from your employee or customer for a contagious disease covered by the rider.

If your business is forced to close due to a government lockdown as during the coronavirus pandemic, you may still need to provide evidence of contagious disease on your property to make a claim.

If your employees work in health care, they might be eligible for workers' compensation claims related to occupational injuries and diseases during a pandemic. Check with your insurance company for details.

Though Insureon doesn't offer communicable disease riders, we're here to help you find other policies that fit your business. Small business owners can get customized insurance protection with one easy online application. Start an application today to compare quotes for the policies you need.