COVID-19 and BI claims: How coverage is triggered

COVID-19 and BI claims: How coverage is triggered

These are uncertain and challenging times. With COVID-19 causing global concern, we understand many Canadians will have questions related to commercial insurance. IBC has produced a brief Q&A document outlining how coverage is triggered and how business interruption policies work.

Commercial insurance is complex and specialized, which makes it important that you speak to your insurance representative if you have any questions or need clarification about your coverage.

Will my standard business policy or business interruption policy cover me for interruptions due to COVID-19?

  • Generally, commercial insurance policies and traditional business interruption policies do not offer coverage for business interruption or supply chain disruption due to a pandemic such as COVID-19.
  • Some organizations may have purchased specialized contingent business interruption coverage, stand-alone business interruption coverage and supply chain disruption coverage which may be triggered as a result of the World Health Organization’s declaration of a pandemic.
  • Commercial insurance is complex and specialized and specific to your business which makes it important that you speak to your insurance representative if you have any questions or need clarification about your coverage.

How does business insurance work?

Property insurance for businesses is designed to protect the physical assets of a business against loss and/or damage from a broad range of causes. There are two basic policy types:

  1. Named perils – covers only loss and/or damage caused by perils specifically listed in the policy, subject to exclusions. Loss and/or damage caused by any other peril is not covered.
  2. Comprehensive – covers loss and/or damage caused by any peril, unless specifically excluded.

What is business interruption (BI) coverage?

BI coverage is an add-on to an existing business insurance policy. In the event of a business temporarily needing to shut down, BI covers continuing expenses or replaces lost profits. There are three types of BI policies:

  1. Gross earnings policy, which pays only until property or damage is replaced or repaired, or stock is replaced
  2. Profits form policy, which continues to pay until a business resumes its normal, pre-interruption level (subject to policy limits)
  3. Extra expense policy, which is designed for businesses that can remain operational during periods affected by loss and/or damage.

How does BI insurance work?

BI policies are not standardized and include many variants, but most contain language indicating that the insurer will pay for the actual loss of “business income” due to the “necessary suspension” of operations during “the period of restoration.” A number of concepts and nuances come into play, including:

  • Physical damage requirement: Most policies require proof that the insured premises sustained physical damage (for example, from fire, heat, flooding or firefighting efforts) that was covered under their property policy, which caused an interruption that resulted in a loss of business income. A business that is interrupted due to the loss of data or a loss of utilities may not have sustained a physical loss. (There is separate utility loss coverage.)
  • Period of restoration: If BI coverage is triggered, a significant issue is defining the period of indemnity or, as some policies refer to it, the period of restoration. Most policies will pay business income loss through to the point that the business is restored or when the coverage expires (usually 12 months from the beginning of the interruption).

COVID-19 and employment insurance – everything you need to know

The excerpted article was written by DLA Piper

Unprecedented numbers of Canadians are applying for Employment Insurance (“EI”) benefits due to an interruption in earnings caused by layoff, sickness or quarantine resulting from the COVID-19 pandemic. In this article, we explore some of the most common questions arising in relation to EI benefits at this time.

What changes have been announced to the EI benefits program in response to COVID-19?

Regular EI benefits

Employees who have been laid off by their employers as a result of business slowdowns or mandatory closures may be eligible to receive Regular EI benefits. Eligible employees may be entitled to receive a maximum of $573 per week for up to 45 weeks. To date, the federal government has not announced any changes to its Regular EI benefits program in response to COVID-19.

EI sickness benefits

Employees who are quarantined or sick due to COVID-19 may be eligible to receive EI sickness benefits up to a maximum amount of $573 per week for up to 15 weeks. Certain measures were adopted with respect to EI sickness benefits in order to respond to novel challenges posed by COVID-19. These measures include:

  • waiving of the one-week waiting period to allow new claimants who are quarantined to be paid for the first week of their claim;
  • the creation of a dedicated toll-free number to support enquiries related to waiving the EI sickness benefits waiting period (1-833-381-2725);
  • waiving of the obligation for people in quarantine to provide a medical certificate in support of their claim;
  • the possibility for quarantined employees to apply for EI benefits at a later date and to have their claim backdated to cover the period of the delay.

How do employees apply for EI benefits?

At this time, applications should be completed online by visiting the Service Canada website. Individuals who present themselves to Service Canada and who would otherwise be able to complete their application online will not be serviced in person. Employees who present themselves to a Service Canada office in person should expect to go through screening and to be required to practice social distancing measures. Employees experiencing symptoms of COVID-19 should not visit or enter any Service Canada office and should call 1-800-O-Canada for assistance with completing their EI application.

What must employers do once employees have experienced an interruption in earnings?

Without delay, employers must issue a Record of Employment (“ROE”) as this is the most important document allowing employees to access EI benefits. In order to complete the ROE, employers should be aware of and use the following codes when indicating the reason for the interruption in employee earnings:

  • When the employee is sick or quarantined, use code D (Illness or injury) as the reason for separation ‎‎(block 16). Do not add comments.‎
  • When the employee is no longer working due to a shortage of work because the business has ‎closed or decreased operations due to coronavirus (COVID-19), use code A (Shortage of work). ‎Do not add comments.‎

How long will it take for employees to receive their EI benefits?

Under normal circumstances, eligible employees are told to expect to receive their first payment within 28 days of submitting a completed application. In the present circumstances and in light of the fact that an unprecedented amount of applications are being received, the processing delay may be longer.

What other financial measures are available to assist employees and employers who are experiencing financial hardship due to COVID-19?

Canada Emergency Response Benefit

The Canadian government previously announced that it would make available an Emergency Care Benefit and an Emergency Support Benefit to employees who did not qualify for EI. On March 25, 2020, the government announced that it created a streamlined benefit, the “Canada Emergency Response Benefit” which combines these two benefits to streamline the application process and will provide $2,000 per month for four months to people who have lost their income due to COVID-19.

Supplementary Unemployment Benefit Plan

Employers who have no choice but to lay off their employees may elect to enroll in a Supplementary Unemployment Benefit Plan (SUB Plan) which allows employers to top up an employee’s employment insurance benefits during a period of unemployment due to a temporary or permanent layoff. The amount of the top up can be up to 95% of the employee’s weekly wages/salary, less the amount of the employee’s corresponding EI benefits.

Work-Sharing Program

The Government of Canada has instituted a “Work-Sharing Program” which exists to assist eligible ‎‎employers to avoid layoffs where there is a temporary reduction in the normal level of business ‎activity, ‎namely as a result of COVID-19. Previously, a Work-Sharing Program ‎could only last for a maximum of ‎‎38 weeks, however the maximum period has been extended to 76 ‎weeks in response to COVID-19. ‎

Participating employees receive income support in exchange for agreeing to work a reduced schedule ‎‎and to share available work with other employees over a specified period of time. ‎

Provincial Measures

Additionally, many provincial governments across Canada have announced measures to assist their respective populations in overcoming what is a period of financial hardship for many. Employers and employees should verify if they are eligible for any such programs.

The COVID-19 situation is a rapidly evolving one with new measures being adopted or modified day-by-day and hour-by-hour. We recommend that you consult with a member of our Labour and Employment Team who will ensure that you are acting upon the most up-to-date information.

Source: Lexology

Lost your income due to COVID-19? Here’s what to do next

Lost your income due to COVID-19? Here’s what to do next

The excerpted article was written by

Hundreds of thousands of Canadians are losing their jobs as the COVID-19 pandemic causes businesses across the country to shut their doors or cut back on operations.

For many, this may be a new experience. Here’s what to do if you’ve suddenly lost your income, from applying for employment insurance to taking care of your mental health.

Figure out which income support applies to you

The Trudeau government announced a new benefit Wednesday that will provide $2,000 a month for four months to Canadians who have lost their income due to the pandemic, after the government was flooded with applications for employment insurance.

Employment insurance generally doesn’t include self-employed or freelance workers, said Vancouver employment lawyer Andrea Raso. But the new benefit does. So, it’s important to check out both options and decide which one fits your situation before you apply for income support.

“People who are independent contractors or, you know, gig workers, they are typically left out.”

Figure out whether you’ve been laid off or terminated

If you’ve been “laid off” the first thing to do is figure out if the situation is permanent or temporary.

In other words, you need to figure out exactly what the terms of your layoff are. If it’s a temporary layoff, meaning your employer plans to bring you back later, you don’t get severance pay, Raso said.

“What it enables the employer to do is to keep the employees, because most employers in this situation want those employees back,” she said.

However, most provinces have a time cap on these types of layoffs (for example, in Ontario, it’s usually 13 weeks, with some exceptions). If the 13 weeks passes and you’re still not working, your employer has officially terminated you and you should check your contract to see what you are owed.

You also want something in writing stating whether you’ve been temporarily laid off or terminated, said Toronto employment lawyer Andrew Langille — and don’t sign anything without fully reading it, or even having it vetted by an employment lawyer.

“You have to clarify what the employer’s intention is in writing.”

If you have trouble getting termination pay from your former employer, Raso said you can escalate the situation.

“Employees have recourse through their employment standards tribunals, and those are very, very simple to access,” she said. (In Ontario, you can start here.)

Get a record of employment

Raso said the most important document you need from your former employer is a record of employment. Whether you’ve been laid off permanently or temporarily, this document is what will help you apply for employment insurance.

Langille says you should also get your T4 from the previous year, just in case.

Apply for government support, and keep track of your application

Next, it’s time to apply for either EI or the new benefit. There are few details about the new benefit, but when it comes to applying for EI, Raso warned that you will be in charge of keeping track of your application, and that with the higher volume of applicants, the process could take awhile.

Langille said it’s important to make a My Service Canada account so you can track your application using the four-digit code you’ll receive in the mail. You will also be responsible for making reports every two weeks, he said.

The Star Vancouver

Iqaluit condo owners see insurance premiums soar

The excerpted article was written by Thomas Rohner
Nunatsiaq News

Condominium owners in Iqaluit say a sharp increase in insurance costs have forced them to the brink—and if recent trends continue, they will be squeezed out of homeownership.

That, in turn, would make Iqaluit’s housing crisis, including for the under-housed, even worse, officials say.

“We were told we were lucky to get insurance at all,” said condo owner Bethany Scott.

“If we didn’t get insurance, what would happen to our mortgages?”

Tracey Oram, another Iqaluit condo owner, said her condo board is in the same boat. She said insurance companies were so scared to give her insurance that, now, her condo board can’t afford a new claim.

“We have a policy that we can’t afford and that we can’t afford to use. So we have a policy that’s no good to us,” Oram said.

Condo owners in Canada need two different kinds of insurance: a residential policy that covers the contents of their unit, and a commercial policy that covers the whole building.

It’s the commercial coverage that has seen a sharp increase across Canada in recent years.

Oram, the treasurer of her condo board, said that when she bought her condo in 2016 the commercial insurance was about $18,000 for 10 units. Her condo board has had one claim since then, Oram said. This year, after months of scrambling to find multiple companies willing to share the risk of the policy, the cost is just over $50,000. That’s an increase of 178 per cent in five years.

Condo fees have had to increase to cover the added expense, with some owners in Oram’s building paying nearly $800 per month on top of their mortgage and residential insurance.

“Our broker basically told us companies are trying to get out of the North….. I would like to feel like we’re not backed into a corner and forced to have one company and no options,” Oram said.

The Royal Bank of Canada told Nunatsiaq News that it sold its Nunavut insurance business to Aviva Canada a few years ago.

“I love my neighbours. It’s a quiet building, very respectful. And it’s nice having your own home, knowing that you’re investing in yourself,” said Oram.

Scott, also the treasurer of her condo board, told a similar story. In 2015, commercial insurance cost about $25,000 for 23 units. This year the cost is just over $60,000, Scott said. That’s an increase of 140 per cent in six years.

“It was $15,000 more than the quote we got, so we didn’t even raise our condo fees enough,” Scott said, adding her condo board has also had one claim in the last five years.

“It’s really unfortunate because developers in Iqaluit are putting up condos. We’re all being funnelled into this homeownership model, and the insurers are like, you’re too risky.”

Scott said she rents out a room from time to time, but with increased costs she’s having to charge more and more—pushing rent in Iqaluit, already among the highest in the country, even higher.

Scott said she loves her home—there’s a friendly vibe among her neighbours, who range from single-income families to retired government officials.

“Someone needs to advocate for us,” she said.

At the moment, there does not appear to be any advocacy for condo owners facing this issue on the local, territorial or national level.

Iqaluit Mayor Kenny Bell said this issue wasn’t on his radar until now.

“That’s obviously really scary, if you can’t get insurance for your home,” Bell said.

The mayor said that, since condo owners tend to be first-time home-buyers or single-income households, they play an important role on the housing continuum.

The housing continuum is widely accepted as the best approach to any community’s housing needs. The idea is that all levels of housing—from emergency to transitional and public housing to rentals and homeownership—are equally important in order to serve an entire community’s housing needs. Any negative change to one level of the continuum puts more stress on the other levels.

“Housing is a huge issue here, there’s a major lack of housing. So any time we can provide lower-cost units for people starting out, that’s really important,” Bell said.

Some professionals making $100,000 a year are couch surfing or unable to afford the increasing rents, Bell said. That puts those who are most vulnerable for housing at even greater risk, as it pushes them further outside the market, he added.

READ MORE HERE: 

Insurance Continuing Education Options for Remote Licensees

Insurance Continuing Education Options for Remote Licensees

More and more Canadian businesses are asking their employees to work from home during the COVID-19 pandemic. Many insurance brokers are now working remotely, and companies are struggling with how to meet the continuing education requirements for this year’s insurance licensing renewal.

Amidst the current inability to conduct or attend in-person seminars or classroom settings, remote online courses are the safest and fastest way to obtain your continuing education credits.

With ILScorp’s flexible online options, it’s easier than ever to access high-quality education that will teach you skills relevant to the insurance industry and meet your mandatory provincial licensing renewal requirements.

ILScorp offers personalized technical and career advancement programs that are 100% online and self-paced. The content is high quality and courses are available in affordable subscription options, plus you can complete them anywhere you have an internet connection on your own schedule.

Getting started is simple.

ILScorp has customized online course subscription options for General, Adjuster, Life, A&S and Financial Planner licensees.

So if you or your entire company are working from home, you can complete your individual insurance CE requirements entirely online.

Group discounts are also available for 3 or more licensees.

COVID-19 and BI claims: How coverage is triggered

Ontario will spend $17B over the next year to help battle COVID-19 pandemic

The excerpted article was written by Colin D’Mello CTV News Toronto

TORONTO — Ontario will spend $17 billion dollars over the next year, record a $20.5 billion deficit and will set aside an unprecedented $2.5 billion dollars for emergency spending, allowing the province to battle the global COVID-19 pandemic.

The Progressive Conservative government unveiled an action plan designed to tackle the growing health and financial crisis due to the rapid spread of the novel coronavirus, including new measures for frontline health care workers, and support for businesses, seniors and families.

The new spending will also include:

  •  $3.3 billion on the health care system, including $1.2 billion on improvements
  •  $3.7 billion on support for people and jobs, including $2 billion in targeted supports, and $290 million in tax measures
  •  $10 billion in support for businesses, including $6 billion in tax deferrals affecting 100,000 businesses.

Ontario Finance Minister Rod Phillips said the new measures are necessary to deal with the “extraordinary threat” to the health and economy of the province.

“It demands an extraordinary response from all levels of government and civil society because we’re all in this together,” Phillips said.

The majority of the focus will be on Ontario’s healthcare system, which has been inundated with pandemic-related cases, with $3.3 billion in spending.

  •  $1 billion contingency fund specifically for healthcare
  •  $341 million for hospital capacity to increase assessments
  •  $243 million emergency funding for long-term care homes to contain the spread of COVID-19
  •  $100 million for public health units
  •  $170 million for community care capacity and Telehealth Ontario
  •  $62 million for health care workers in assessment centres, hospitals and community
  •  $75 million for new personal protective equipment for health care workers
  •  $80 million for ambulance and paramedic services
  •  $70 million for new infection control measures in retirement homes and emergency shelters
  •  $1.2 billion will be spent on improving services in health and long-term care homes.

The government will also spend $3.7 billion dollars to help the hundreds of thousands of people affected by the pandemic – from families forced to stay at home in self-isolation, to those who have lost their jobs as a result of the economic shock.

Families will get a one-time payment of $200 per child up to the age of 12, to help parents keep their children engaged during an extended time away from school or daycare.

The $340 million initiative would be available on Apr. 6 through an online portal where parents could apply.

The government will also spend $3 million dollar per day to offer free emergency daycare for frontline healthcare workers and first responders.

Meanwhile, the government said student loan repayments, under OSAP, would be suspended for six months during the COVID-19 crisis.

As businesses face a major financial hit due to forced COVID-19 closures, the government will spend $6 billion in tax deferrals this fiscal year giving owners up to five months – Aug. 31, 2020 – to pay their provincial taxes.

The government says the exemptions would apply to: Employer Health tax; Tobacco tax; Fuel tax; Gas tax; Beer, Wine and Spirits tax; Mining tax; Insurance Premium tax; International Fuel Tax and the Race Tracks tax.

The government expects to help roughly 100,000 businesses with the program and projected that businesses would collectively save $25 million in interest and penalties.

Economic impact

COVID-19 is expected to carve out $5.8 billion dollars from the province’s revenue stream in 2020-21, largely due to drops in personal income and corporate tax revenue, and due to the closure of casinos operated by the Ontario Lottery and Gaming corporation.

To ensure the province can withstand the economic blow, the Progressive Conservative government – which has been focused on fiscal prudence and restraint – will record a massive $20.5-billion deficit in the year 2020-2021.

The massive deficit figure is comparable to the financial crisis of 2008 when the government, under then-Premier Dalton McGuinty, spent $24-billion dollars to stabilize the economy.

While the government acknowledges that the COVID-19 outbreak has “significantly impacted” Ontario’s economy – which the government said recorded strong growth before the pandemic – the fiscal document states that the economy should turn around in the second half of 2020.

“Pent up demand for goods and services along with and improving labour market would add momentum, supporting stronger consumer spending,” the fiscal document reads. “However, some sectors will take longer to recover.”

In his remarks to the Ontario legislature on Wednesday, Phillips called COVID-19 a generation defining moment that requires a non-partisan approach to financial stability.

“And we are confident that every dollar we invest through this action plan that saves a life or saves a job is a dollar well spent.”

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