Last Revised: Aug 13, 2020 | 5:00PM EDT

As an agency dedicated to serving small businesses, we understand all too well that COVID-19 is affecting our communities all across the country.

We know that you have questions about your business insurance during the Pandemic, so we’ve pulled together this FAQ to help address some common concerns. But as we all know, this is a fluid and ongoing situation, and things can change quickly. We’re in touch with our insurance carrier partners, and we’re monitoring the industry and government responses very closely. We will update this FAQ page as we have new or amended information to share.

For your convenience, we’ve categorized the FAQs into four areas of information:

Are you covered during COVID-19?

Important workers’ comp information

Cash-flow solutions and Pay As You Go

Other important COVID-related information

We hope that you, your employees, and your families are safe and healthy as we all work together in these extraordinary circumstances. Contact us if you need us.


Q: Will my workers’ compensation policy cover me for COVID-19?

A: Workers’ comp policies include language about coverage for employees when employees are unable to work after contracting a work-related disease particular to the workplace. An important consideration is: did an employee who unfortunately contracted COVID-19 do so in the course of their employment? In these cases, the burden is typically on the employee to prove the occupational nature of the illness.

However, on May 6 California’s Governor Gavin Newsom announced he had signed Executive Order N-62-20 ordering that workers who contract COVID-19 while on the job may be eligible to receive workers’ compensation. As it stands today (meaning short of any modifications to the Order, further legislative action or legal challenges), the order creates a “time-limited rebuttable presumption” for accessing workers’ compensation benefits, applicable to any Californian who must work outside of their homes during the stay at home order.

What this means in plain English is that the new law automatically presumes employees who test positive for COVID-19 contracted it while outside the home and working. It covers all employees, not just front-line workers. 

In addition, employers have to file the claim with their workers’ comp carrier versus the normal process of employees filing claims with their healthcare providers. For these cases the burden is no longer on the employee to prove they contracted COVID-19 at work. Instead, the burden is now on the employer to “rebut” — prove that the employee did not contract it at work. 

For an employee’s claim to be valid, a doctor has to validate the COVID-19 test on or between March 19 and July 5, and the test must be taken within 14 days of the employee working outside the home. California is considering extension beyond July 5. 

In light of this order, we encourage employers to closely follow CDC and OSHA guidance for minimizing workplace exposures. Here’s another good analysis of the Executive Order.

Additionally, some states have worked on legislation requiring insurance companies to ignore COVID-19 claims when pricing future workers’ comp policies. We will continue to monitor government action closely.

If your employees are out of work, it’s also important to consult your disability policy. Note that some states are waiving the waiting period for coverage to begin for disability and unemployment benefits.

Q:Will my business owner’s policy (BOP) cover me for lost revenue due to COVID-19?

A: In most cases, no. Most BOPs only cover lost income for business interruption if the interruption is caused by direct physical damage to property — for example, property damage resulting from a fire. Also, most BOPs specifically exclude damage from a virus. 

“Civil Authority” actions can trigger business interruption coverage, such as when a local government forces the temporary closure of a business after a water main break, but the same tests for physical damage and the same language would still apply around damage from a virus.

Previous virus outbreaks have informed how the insurance industry handles these scenarios, but things can change quickly. For instance, following the terrorist attacks on 9/11, the Federal Government stepped in to enact a new terrorism protection program and the insurance industry is lobbying for something similar in response to COVID-19

Q: Will my general liability policy cover me for COVID-19?

A: We’ve heard questions from businesses about their general liability coverage, including a concern about patrons of a store claiming they contracted COVID-19 while in that store, or about customer exposure to the virus from shipped goods. 

Generally for a claim to be successful, the claimant has to prove legal negligence. We have not yet seen any claim decisions based upon legal neglect and the COVID-19 virus, but we’ll be watching closely.

Q: Will the states and/or the Federal Government enforce coverage of business interruption?

A: It doesn’t seem likely for existing policies. There is legislation in various stages in several states, but it’s probably just to put pressure on the Federal Government. It’s unlikely to pass in the states. If it were passed, it would be met with immediate legal action by the insurance industry, and experts feel a state mandate would be unconstitutional. 

There have also been a number of lawsuits brought by small businesses against insurers for denying COVID-19-related business interruption claims. Although the number of suits like these will rise in the coming weeks and months, it’s not clear if they will succeed.

Looking forward, there are active discussions underway at the federal level to provide coverage for business interruption caused by the economic slowdown from COVID-19. A number of industry associations are also joining forces and gearing up to petition the Federal Government to raise a recovery fund, modeled after the Terrorism Risk Insurance Act (TRIA) enacted after 9/11. Business interruption is an area of this crisis that will continue to get attention from the entire insurance industry, as well as the Federal and State governments. We will be watching this process closely.

Q: What should I do if I have sick employees, lost revenue or other damages that I believe should be covered by my insurance policies?

A: Submit a claim to your insurance carrier. As insurance agents, we’re here to help you understand the claims process and to act as your advocate, but we don’t decide the outcomes of claims. Insurance companies pay claims per the terms of the insurance policy. Also, please see the FAQ above about workers’ comp, specifically.

Q: Are the “Families First” sick pay and “Paid Family Medical Leave Act (PFMLA)” programs under the CARES Act counted as payroll for calculating workers’ comp premiums?

A: The benefits of both these programs are currently being considered in the same way as other types of compensation, and are therefore being counted as payroll in calculating workers’ comp premiums. However, the National Council on Compensation Insurance (NCCI) and other state bureaus are weighing in. We continue to watch this issue closely and will update our FAQ as soon as we know of any changes.

Q: I’m paying my employees even though they’re not working. Is there anything I can do to lower my workers’ comp premium during this time?

A: Nearly all 50 states have implemented a special employee classification for those employees getting paid but not working (#0012 is the “class code” in most states). This enables employers to suspend Pay As You Go workers’ comp premiums for the period of time an employee isn’t working (and is retroactive to March 2020 in most states). This is particularly relevant to employers that received Payroll Protection Program (PPP) loan proceeds during a shutdown. As a reminder, your state’s minimum premiums will still apply.

If you’re an employer that does not currently have a Pay As You Go workers’ comp policy (but have a “direct-bill” policy instead, meaning all or part of your annual premium was paid at the beginning of your policy), let your insurance carrier know about the change in employee classification. If your overall payroll levels are lower than the estimate on which the annual workers’ comp premium was based, you may pay less on the total annual premium and may be entitled to a refund as a result of your annual workers’ comp audit. But it’s important to keep your carrier informed about these changes to your situation.

Q: Because of the COVID-19 disruption, my employees are doing different kinds of work than they normally do. How does this affect my Pay As You Go workers’ comp premiums? [For example, a line cook who’s now doing menu research from home, or driving deliveries around town] 

A: Most states have made accommodations for employees who are doing different things because of the COVID-19 situation. If your employees are now working from home, in most cases they can temporarily be assigned the clerical (#8810) class code. If COVID-19 has changed the nature of their work in other ways, other class codes may be assigned. If you have a Pay As You Go workers’ comp policy, you may be able to lower your premium payments as a result of this temporary class code change. As a reminder, your state’s minimum premiums will still apply.

If you’re an employer that does not currently have a Pay As You Go workers’ comp policy (but have a “direct-bill” policy instead, meaning all or part of your annual premium was paid at the beginning of your policy), let your insurance carrier know about the change in employee classification. You could potentially qualify for a premium reduction or a refund on your workers’ comp policy at audit time. It’s important to keep your carrier informed about these changes to your situation.

Q: I’ve temporarily shut down. Should I cancel my policy?

A: No. Contact us and let’s review your options, as you may have employees, property, or ongoing liability of some kind.

Legally, in most cases if you have employees you need workers’ comp. Remember that the premium you pay for a workers’ comp policy is mostly based on your payroll level. If you have a Pay As You Go workers’ comp policy and your payroll is down, you will pay less in premium. Either way, let’s work together to keep your coverage in place, including by using the payment and reporting flexibility offered by the insurance industry.

Q: What if my business is having cash flow issues?

A: The insurance companies we work with are extremely understanding of the crisis affecting businesses, and took quick action to help keep coverage intact. The facts and remedies vary by policy type and insurance carrier, so ask about your options.As the crisis evolves, new options may arise. Contact us to discuss how we can assist.

Q: Ok, what are some ways I can help my cash flow?

A: You may be able to get some cash flow relief by switching from a traditional workers’ comp policy to Pay As You Go workers’ comp, even if you’re mid-term in your current policy. If you’re a payroll customer of one of AP Intego’s payroll partners, we may be able to switch you over. If so, you could receive a lump-sum refund of your premium for the unused portion of what you paid up front, and then pay only the premiums required based on real-time payroll levels, which are likely reduced at this time. Ask your agent about switching to Pay As You go, or ask your payroll provider if they’re an AP Intego partner and they can help you.

For more on how switching to Pay As You Go workers’ comp can help your cash flow, check out our video: COVID-19: Protect Cash Flow with Pay As You Go

Q: I’m already a Pay As You Go workers’ comp policyholder and I’m not able to to run payroll at this time due to COVID-19. Will my policy be cancelled?

A: All of our carriers have implemented extensions and other measures to help small businesses keep their coverage active while they’re not running payroll. Every carrier has its own rules and guidelines for how long this non-cancellation “grace period” will last; some ended as soon as June 15th, while others extend into August. We have also worked with some of our carrier partners to put measures in place to keep policies active beyond the stated grace period, but these vary and you’ll need to contact our support team to learn about what options exist for your specific scenario. As a reminder, if you’re already planning to run payroll before the grace period for your carrier ends, you’re all set!

Also, please see the question above about workers’ comp premiums for employees you are paying but who are not working.

Q: What is the CARES Act?

A: It’s the “Coronavirus Aid, Relief, and Economic Security Act” (CARES). Phase 3 of the Act, signed into law by the President on March 27, is a massive $2.2 trillion economic relief package that includes  public health spending to confront coronavirus, cash relief for individual citizens, a broad lending program for small business, and targeted relief for hard-hit industries.

Q: How does Phase 3 of the CARES Act affect my insurance coverage?

A: For small businesses who are affected by the COVID-19 crisis, the most relevant part of the legislation is the Payroll Protection Program (PPP) which provides loans that help businesses pay expenses to stay in business and continue to employ staff. 

Loans are available for businesses with 500 employees or fewer, in which “uncertainty of economic conditions makes necessary the loan request to support ongoing operations.” Therefore the funds provided to cover certain expenses impacted by the economic crisis, including your payroll, mortgage payments, utilities, health insurance premiums, and other employee benefits. Notably, the loan can be forgiven if the proceeds are used for many of these expenses, although a minimum of 60 percent must be used for payroll (reduced from 75 percent on 6/5). There is also no requirement for personal guarantees or collateral, and you don’t have to demonstrate that you were denied credit elsewhere. Loan amounts are up to 2.5x a company’s average monthly payroll, capped at $10 million. 

PPP loans are available through your bank and are administered by the U.S. Small Business Administration (SBA). Here is a helpful FAQ from the SBA , as well as another helpful document about the program as it continues to evolve. Although the original funds in the PPP were exhausted on April 16, another $484 billion, most of which is earmarked for small businesses, was approved by both Houses of Congress on April 23. The last day to apply for a loan through the PPP program was June 22. Regardless, contact your bank about the program as there may be other options available to you.

On Jun 17, the SBA and Treasury Department issued two loan forgiveness applications for the PPP. You can find information about them here.

If you haven’t been approved for, or recieved PPP loan funds, you can take advantage of the Retention Tax Credit, another advantageous program in the CARES act meant to help you keep your employees. Contact your accountant to learn more. 

Additionally, on April 9th the Federal Reserve Bank of the United States released details of its own $2.3 trillion loan program in support of businesses hurt by the coronavirus.

The Federal government is currently in deliberations which, if successful, will create a new multi-billion COVID relief stimulus package.

Q: Do I need proof of insurance when applying for a PPP loan?

A: Our Customer Service Department fielded calls from some customers requesting certificates of insurance (COIs) for PPP application purposes. We believe that since the Small Business Administration gave banks latitude to define their own PPP underwriting processes and loan documentation requirements, the need to have proof of insurance varied and will continue to do so.  For AP Intego customers, if you are in need of proof of insurance for PPP purposes or any reason at all, you can quickly and easily download any number of COIs by logging into or signing up for our Customer Dashboard.

Q: My bank has told me I need to open a separate bank account for my PPP funds and I want to use the money for payroll. As a Pay As You Go workers’ comp policyholder, do I need to change my bank account with AP Intego?

A: While many banks and other lenders are suggesting this, there is nothing in the CARES Act and nothing in the SBA guidelines that requires a separate bank account. We suggest that you contact your bank to determine if this is actually necessary.

If your bank is requiring you to open or use a separate bank account in order to keep your PPP funds segregated, you do not have to switch the account you’re using for your Pay As You Go policy at AP Intego. 

Under current SBA guidelines, workers’ comp premiums are not considered a qualified payroll cost and are therefore not forgivable PPP expenses. Furthermore, only one bank account can be tied to your Pay As You Go policy to pay your premium when you run payroll.
Therefore, we recommend that you simply transfer the amount of funds you need to pay payroll from your PPP bank account into your existing bank account every time you run payroll. By doing so, you can both comply with your bank’s requirement to keep PPP funds separate, while avoiding the process of switching the account you use for Pay As You Go premiums. Here’s some good insight and advice from a CPA on the topic.

Q: I heard cyber attacks have increased since this crisis began. Is this true?

A: Unfortunately there has been a significant increase — perhaps as high as 600 percent — in cyber attacks on businesses during the crisis as hackers and other cyber criminals look to take advantage of chaos and panic. In addition, as our nation’s workforce has mostly transitioned to working from home, there are more opportunities for bad actors to phish unsuspecting workers and target unprotected equipment. This is a good time to bring awareness of such attacks to your employees, provide online training about cyber security, shore up your tech, and consider how insurance can protect you from the consequences of cyber attacks.

Q: I saw that California is going to make insurance companies offer refunds on premium for COVID-19-related slowdowns. What is that all about?

A: On April 13th, the California Insurance Commissioner announced that insurers in the state would be required to “make an initial premium refund for the months of March and April to all adversely impacted California policyholders… no later than 120 days after [April 13, 2020].”

This order pertains to:

  • Workers’ compensation insurance (for non-Pay As You Go policies)
  • Commercial auto insurance
  • Private passenger automobile insurance
  • Commercial multiple peril insurance
  • Commercial liability insurance
  • Medical malpractice insurance
  • Any other line of coverage where the measures of risk have become substantially overstated as a result of the pandemic.

If you’re on Pay As You Go workers’ comp, and your payroll has gone down, your premium has already adjusted down with your payroll. It should be accurate and up to date. You haven’t overpaid and you’re already seeing cash flow benefits from Pay As You Go.

Insurance companies will decide how to comply with the order, and refunds may take the form of premium credits, premium reduction, return of premium, or premium adjustments. 

Q: Where can I find resources for guidelines on how to reopen my business?

A: Here are a few resources you can reference:

The CDC has put together a resource to help you plan, prepare, and respond when reopening your business. 

OSHA has general guidelines as well as some for specific industries (English and Spanish).

The FDA has guidelines specifically for retail businesses handling food.

The U.S. Chamber of Commerce has a guide, as well as a state-by-state resource center.

You can also review some of our carrier partners’ guidelines: 

Additionally, we encourage you to visit your state’s official .gov website ({yourstate}.gov) for any news or updates on reopening that pertain specifically to your local conditions.

Q: I still have questions, what should I do?

Don’t hesitate to contact us or your insurance carrier. We’re all in this together.

Also, we know you have questions and needs that extend beyond insurance when it comes to how your business can overcome the challenges of COVID-19. Here’s a resource site that we think you’ll find helpful

Copyright © AP Intego, 2021


Call: 888.289.2939
Fax: 888.289.2988

1601 Trapelo Rd. | Ste 280
Waltham, MA 02451
375 Woodcliff Dr. | Ste 103
Fairport, NY 14450
3825 Hopyard Road | Ste 180
Pleasanton, CA 94588
201 Columbine St. | Ste 300
Denver, CO 80206

Call: 888.289.2939
Fax: 888.289.2988

1601 Trapelo Rd. | Ste 280
Waltham, MA 02451
375 Woodcliff Dr. | Ste 103
Fairport, NY 14450
3825 Hopyard Road | Ste 180
Pleasanton, CA 94588
201 Columbine St. | Ste 300
Denver, CO 80206

Copyright © AP Intego, 2021