Most business insurance policies exclude claims related to infectious diseases. A communicable disease rider extends your policy's coverage to fill this gap.
What is a 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, 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.
Which insurance policies can include communicable disease riders?
You can add a communicable disease rider to a variety of business insurance coverage, including business interruption, general liability, and commercial property insurance. The rider covers different liabilities on each policy.
Business interruption insurance
As a business interruption insurance rider, communicable disease coverage can provide compensation if your business is forced to close due to disease. If your 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.
General liability insurance
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. Read more about the coronavirus and special event coverage.
Commercial property insurance
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.
How to make a communicable disease rider claim
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.
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