COVID-19 Is Interrupting Your Business: Are You Insured?
Every business is affected by COVID-19. Captive insurance provides business interruption coverage for low frequency, high severity events like pandemics.
Every Business Is Now Affected
Is COVID-19 interrupting your business? Every passing day makes this more and more a rhetorical question as everyone and every business is now affected by the coronavirus. Billions of dollars are being lost as a result, both directly and indirectly.
Major corporations have reported staggering losses. Under Armour projected $50-60 million in lost sales. Ralph Lauren projected losses as high as $70 million. Travel and hospitality companies like Hilton, Royal Caribbean Cruises, TripAdvisor, and Expedia have all predicted varying degrees of business slowdowns.
Nearly 4 in 5 American companies with operations in China reported insufficient staff to run full production lines. Nearly 3 in 5 companies said demand for their products would be lower than normal in the months ahead.
The Cost Is Personal
The projected $2.7 trillion global cost is relevant. However, the amount of money that your business loses is more than relevant — it's personal. The loss of production and revenue is real.
There is insurance for this situation. What may cause business interruption in your business now and in the future? Insurance doesn't get your workforce back in action, but insurance does make you whole.
Captive Insurance Covers Business Interruption
It's not just the travel industry — every industry is being affected both literally and figuratively. Does your business depend on parts from another country which you are not receiving? Those companies with coverage are now filing claims from their own captive insurance company.
Claims may be made under a variety of written lines of coverage such as supply chain interruption, pandemic loss, business interruption — civil authority or emergency response risk, or loss of a key employee.
One of these exposures isn't the only line of coverage within a captive insurance policy, however the interruption we all experienced is a perfect example of low frequency, high severity coverage that may be purchased for events just like this.
Preventative Measures and Insurance
History tells us another interruption will occur in the future. Are you insured? Preventative, proactive measures can and should be taken — including insuring your business through your own captive insurance company.
Act or be acted upon. We can control the insurance, but we can't control the frequency or how long that frequency event will last. Insurance does provide protection, both specific and aggregate. Your lines of coverage, in your captive insurance company, protecting your business.