What happens if the authorities require my business to close?
Does Business Income insurance respond if a business shuts down because of the coronavirus? What happens if the authorities require the business to close? There is a short answer to these questions, but it's not necessarily a simple answer.
The short- and long-term impact of the coronavirus is anyone’s guess. Never before has the United States experienced such a significant interruption of business – and of everyday life. There are more questions than answers, each of which has potential implications, especially when it comes to insurance coverage. Many policies spell out limits and exclusions but few anticipated this atypical interruption of everything from supply chains to vacations. Even as this is written, creative claims and lawsuits are emerging.
I receive calls and emails every day regarding the insurance implications of this virus, and the most common question relates to business income, specifically:
No, there is generally not business income coverage in this situation. That's the short answer. The longer and more difficult answer is it may all end up being determined by the courts in lawsuits that are most certainly coming, so the truth of the matter is we may not know the answer right now. If coronavrus (COVID-19) causes or results in damage to your business, coverage will depend on the specific facts of the claim and the specific policy’s language. All coverage decisions require an analysis of the claim’s unique facts against the specific terms of the policy, which can only be determined by your insurance carrier. Therefore, it's difficult to advise whether your business should or should not file a claim (the decision is ultimately yours to make, but it probably can't hurt to try).
Before business income responds there must be damage to property leading to the cessation of a business. This requirement applies to business income dependent property losses (supply chain) and civil authority losses covered by business income policies. Additionally, there is a specific property exclusion applicable to viruses that will generally apply. This is true of “standard" business income forms; there may be some proprietary forms that respond, but these are rare.
If it hasn't already done so, your organization should develop and implement a comprehensive Business Continuity Plan (BCP). A BCP is a very important part of your overall risk management and emergency procedures plan and should be one that includes the necessary steps to take in the event of an epidemic/pandemic. And, of course, always follow recommended precautions to keep yourself, your employees, and your visitors safe by staying up-to-date on all City, County, State and Federal notices, in addition to recommended travel restrictions and preventive measures.
Above, I have provided a download link for a white-paper that gives a broad overview of how insurance generally responds to the Coronavirus peril. I'm not an attorney, so if you want legal opinions, you will need to go somewhere else for those; otherwise, the white-paper provides some basic guidance on insurance coverage.
As always, feel free to reach out to Jon Jepsen at SentryWest Insurance Services if you need help or have additional questions.
Disclaimer: This communication is not intended to provide any legal advice or opinion on any individual situation and should not be relied on to determine insurance coverage or lack thereof as relates the Coronavirus. Insurance forms and endorsements vary based on insurance company, changes in edition dates, regulations, court decisions, and state jurisdiction. The information is based on review of insurance coverages, sources we deem to be reliable and communications we have received from insurance companies and other resources. We make no representation or warranty as to the accuracy of information as applied to individual cases. Please advise our office if you want to submit any claim for coverage with your insurance companies.
(Originally posted at: http://www.insurancestylist.com/blog/fight-back-against-unfair-chargebacks)
As most small business owners know, accepting credit cards is a necessity in today’s competitive and fast-paced environment. Technology makes it easier than ever to accept payments from your customers.
You can even use your cell phone or tablet if your business is mobile. While credit cards can be great for ease, they do pose some cons for business owners when it comes to fees—specifically chargebacks.
Chargebacks were originally designed to protect customers from fraud. Unfortunately, chargebacks are sometimes used for “friendly fraud”. This type of fraud occurs when a customer receives a product or service, but contacts the credit card company to complain that the item was never received or they never made the charge. The credit card company will investigate the complaint and refund the customer if they find in his or her favor. If the complaint is found in favor of the seller, the business will still be charged a fee for the investigation. A January 2016 study found that 80% to 90% of successful chargebacks were resolved in favor of the customer.
Customers sometimes have valid complaints about products and services that do warrant a chargeback situation, but what happens when your business requires appointments to book services and your customer is a no-show? Businesses such as salons, automobile repair shops, and hotels often have to deal with this very issue. Many businesses need to know the number of customers they will serve in a given day for planning and staffing purposes. When a customer doesn’t show up for an appointment, it is the business that has to deal with lost revenue. Many service industries require notice when a customer is not able to make an appointment or reservation. For example, many hotels will charge the equivalent of a one-night stay if the customer doesn’t give a 24-hour cancellation notice. Salons and spas often charge a cancellation fee for the same reason. This practice makes sense for many service-oriented businesses, because without notice you are not able to rebook the time slot or date with another customer.
The problem is that many customers call their credit card companies to dispute these cancellation fees. Here are a few ideas to help you avoid getting stuck in this situation and to fight back against unfair chargebacks:
Chargebacks can be a frustrating battle—especially when your business is appointment or reservation based. Hopefully with these tips you will be able to cut down on hassles and find a little more peace when dealing with customer credit card disputes.
https://www.nerdwallet.com/blog/credit-cards/credit-card-chargebacks/Entrepreneur Magazine, November 2016. Page 20-21
This post was written by Deidre R., a Product Analyst in the Commercial Lines Marketing Department at Acuity. Deidre’s experience also includes nine years as an Account Manager at an insurance agency. She received her bachelor’s degree from St. Norbert College in De Pere, Wisconsin, and her master of organizational behavior from Silver Lake College in Manitowoc, Wisconsin. Her hobbies include volunteering and event planning for a local women’s shelter, yoga, crafting, reading, and biking. She also enjoys spending time with her husband and dog.
Did You Know Hackers Can Infiltrate Your Network Via Fax Machine?
Fax machines seem to be a thing of the past for many new age businesses and professionals these days, but in reality, they’re still being used. In fact, according to Jive, more than 46 million businesses still use fax machines in some way or another. Typically businesses are still using fax machines because their clients still use them, potential government regulations or industry standards, proof of paper trail, convenience, and in some instances, fax machines are more secure.
However, an Israeli cyber security firm, Check Point, recently discovered that hackers may be infiltrating businesses networks using just a fax machine number…which might not even be connected to the internet. The researchers at Check Point demonstrated that a hacker can execute a script that targets the victim’s fax number in order to obtain network access. According to the researchers, the attacker can then use EternalBlue, a NSA-developed exploit leaked by the Shadow Brokers hacker group, to further infiltrate the network and execute malware.
Using the malware executed for this attack, the hacker can search and exploit specific information about the victim and send it back to the hacker’s fax machine. Additionally, the hacker can severely manipulate what gets sent and received. For example, if the victim sends sensitive account information to their bank, the cybercriminal can program the fax machine to send a copy to the attackers fax machine. The attacker can also tamper with the content included on the document being sent by altering the information to include or exclude what they to be attached to the document.
It’s worth noting that having a cyber security insurance policy in place will protect your business in the case that your fax machine does get exploited by hackers. Contact Jon Jepsen at SentryWest Insurance for a cyber insurance quote.
(Courtesy Evolve MGA https://evolvemga.com/fax-machines/?ct=t)
Jon Jepsen, CIC