When talking about natural disasters beyond human control, these events are considered an “act of God” by insurance companies. Although this term isn’t found in most insurance policies today, it is still a common terminology. But because of the events that happened last year due to the initial outbreak of the COVID-19 virus, many are wondering if this is considered an act of God, especially by small business owners.
There’s no denying the COVID-19 pandemic is a global disaster. Despite vaccines rolling out, many countries are still on lockdown trying to contain the virus. Sadly, with the different variants popping up, the end to the pandemic can still be unclear to most.
Unfortunately, there are business insurance policies that exclude infectious diseases like COVID-19, and don’t consider them an act of God. But if that’s the case, many businesses will experience huge financial loss and have difficulty recovering.
This is why you must go over your insurance and find areas in which you’re covered to help your business. In some cases, business owners may have a landlord liability insurance policy, but you’ll need to check if it’ll protect you if you’ve been closed or out of business due to the pandemic.
What are the Different Events Considered as an act of God in Insurance?
An “act of God” describes an event that can’t be predicted or prevented — basically, something that’s out of human control. These natural disasters include the following:
- hurricanes
- floods
- earthquakes
- storms
- lightning strikes
- tornadoes
Seeing as the act of God is unclear to most, insurance providers no longer include this term in their policies. But instead, to avoid any confusion, insurers list down the natural disasters that are covered or excluded from the policy.
However, there is a debate whether pandemics are considered an act of God. But if you find that your policy has this language, it’s best to speak to an insurance agent to see if you’re covered for financial losses during the COVID-19 pandemic.
Are There Insurance Options that Cover an Act of God?
Unfortunately, commercial property insurance policies exclude damages from acts of God, such as hurricanes and earthquakes. However, don’t feel disheartened because you have options when starting these policies.
Some insurance providers will let you choose between open perils insurance policies covering all events that are not excluded in writing or named perils policies, which are limited to certain events. You should note that insurance providers who offer open perils policies charge higher premiums since they have more comprehensive protection.
How Can the Pandemic and My Insurance Policy Affect My Business?
The pandemic has forced businesses to move to an online platform or limit business operations, resulting in reduced revenue, or worse, forced closures. As the economic downturn affects everyone, many business owners are wondering if they can stay afloat during these times.
Here is how COVID-19 is generally covered in business insurance policies:
- Business interruption coverage reimburses you for lost revenue due to unexpected events. Note that this is a rider you can add to your business owner’s policy.
- Commercial property insurance doesn’t protect against losses caused by bacteria or viruses.
- General liability can help you pay for lawsuit costs and damages. This is considered when your business is accused of exposing customers, employees, or clients to the virus
With that being said, it’s imperative to be particular about your insurance policy. That’s why it’s best to speak to experienced agents and check the best business insurance option for you. In some cases, they may recommend landlord liability insurance to help protect your business space during uncertain times.
The Bottom Line: Speak to an Insurance Agent to Help Your Business Get Proper Coverage
There’s no denying that the COVID-19 pandemic truly changed the way businesses operate. With that being said, it’s essential to know if you have the proper coverage for events such as the COVID-19 pandemic. Checking with your agent for commercial insurance can help cover your business concerns, allowing you some breathing room for your financial woes during the pandemic.
How Can We Help You?
If you’re running a business, purchasing commercial insurance is extremely important to help protect your business’s finances. With that being said, it only fits that you choose the right insurance agency to work with.
Quesurance is the leading insurance agency in Hopatcong and the surrounding New Jersey communities. Our commitment to protecting the people we work with has been our core value for years and has allowed us to provide exceptional service to our clients.
Learn more about how we can protect you today!
