The coronavirus (COVID-19) crisis has park owners asking a variety of questions and keeping an eye on state and federal orders that may impact their parks.
Some of the questions park owners are asking are centered around insurance coverage.
Irene Jones, development manager of Poughkeepsie, N.Y.-based Marshall & Sterling Insurance’s campground and hospitality program, told WOODALLSCM.com that one of the biggest questions she has been fielding from park owners is if they are covered due to a COVID-19 related shutdown.
“The big answer to that is that viruses are generally excluded in most policies,” she noted. “If you are shut down, would I make a claim? Yes. I would say make a claim if you think that you might potentially have a claim because you want the carrier to look at your particular instance.
“But the other thing is that you also need to document your lost business, whether it’s due to a shutdown or due to cancellations or a change in business,” Jones added. “Because that documentation is going to help you with insurance claims and also will help you when applying for disaster assistance and Small Business Administration (SBA) loans.”
Jones told WCM that viruses are generally excluded as a cause of loss on a property insurance form and that in turn causes it to be excluded as a loss for business interruption insurance.
“If there was a movement to have it covered, because this is such a widespread pandemic and the rates for this were not anticipated, it would be a very large burden on the insurance industry,” she explained. “Which, in turn, is an essential part of keeping society going for all of the things that we need insurance for. And so, therefore, it would be a burden on the campground industry.”
Jones said that it is important for owners to realize that when they talk about risk management, transferring your risk with insurance is only part of the puzzle.
“Risk management also includes knowing how to control the risks and avoiding things that don’t make sense,” she noted. “And I think right now it’s very important for campground owners to start assessing what their campground is going to look like. What does being open look like for me? Because you probably shouldn’t be doing all your normal things.”
Jones said she has also been fielding questions from owners worried that they might get sued if campers contract COVID-19 while at their park.
“Generally speaking, it is excluded, but every policy is a little bit different and there are some out there that may have some coverage extensions here or there,” she explained. “That’s why you always want to put in the claim. You can be sued for making the decision to close. You can be sued for making the decision to stay open. That’s what’s really tough for people.
“I think that comes to another issue that is important for people while they assess everything and that is making sure they comply with the regulations,” Jones added. “This is not a time for cowboys because the government is going to crack down on people who are open but shouldn’t be open, and if you are supposed to be doing something, make sure you are doing it.”
Jones said that if owners are feeling a pinch in their cashflow that they should contact their insurance carrier and ask for flexibility on their bills.
“It is also important for owners to think about how their season is going to be affected and it’s really too early to tell for people,” she explained. “But if they are going to have a down season, where they have much less payroll, that’s going to mean less workers compensation insurance exposure. That means they can get that premium down. So, now they have less gross receipts and that’s going to affect their liability insurance. That could also get the premium down.
Now, owners need to be prepared for when they go back to business as normal, as their premiums are going to go back up,” Jones added. “But have those two conversations about billing and how a change in business is going to affect premiums because that’s a smart way to approach it.”