Business owners have many questions about the impact of COVID 19. Here are some answers regarding insurance from Desert Insurance Solutions:
What options do laid off employees have on health insurance?
First, if their spouse has an employer plan, they should try to get on that plan.
Second, COBRA will continue their insurance, but it will be at full cost.
Third, for lower cost options they should consider the Affordable Care Act. In California that’s Covered California, and the lower income version is Medi-Cal. Open enrollment has been extended until June 30, 2020.
What if I can’t pay for my insurance for a few months?
There is no law or common policy that suspends cancellation for non-payment, but many if not most carriers are showing flexibility for periods up to 60 days. Also, if you pay annually you may be able to change to a monthly payment program. You should call your carrier’s billing department and explain your situation.
If I let some employees go, will the cost of my insurance decrease?
Normally your general liability costs (affected by revenue) and your worker’s comp costs (affected by payroll) will be adjusted when your business is audited at renewal. But because of the rapid changes taking place at this time, many carriers are making midstream adjustments. If you have significant business changes, call your insurance broker.
I own a business and am closing up shop. Should I just cancel my insurance?
No. If you rent property you are still liable even if you vacate. And consider professional liability…many of these policies only cover you if the “claims made” when the policy is in force. So if you cancel your policy on March 1, then are sued on March 15 for an event that occurred on February 15, you are not covered. You need an “extended reporting period” policy (sometimes known as a “tail”) to protect you from past incidents. Talk to your insurance broker.
Carrie Babij is President of Desert Insurance Solutions in La Quinta, and has more than 25 years’ experience with high net worth personal and commercial lines of insurance. For more information, contact Carrie at email@example.com.
Last modified: March 31, 2020