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The last weeks or more have been terrible for everyone, and hope we all find the strength to overcome this unusual situation. Our deepest sympathies go to all who lost their close ones due to the novelty Coronavirus and our thoughts are with those who are suffering medically, but in this notice we want to address those who are suffering with their  businesses.


On March 13 the Parliament voted to declare a state of emergency in Bulgaria in attempt to slow the spread of coronavirus in the country. This act gave grounds for the Minister of Health to sign an ordinance which in practical terms closed down all Shopping centers, Food restaurants, Clubs, Cultural and Leisure venues. Our children have been released in an Epidemic student vacation, not able to visit Schools, Universities and or any other educational center. International transport is plagued with unprecedented delays. In the days that followed, executive orders limited visit and travel to all major cities. Bansko town is in lockdown and no one knows how many populated areas will follow suit in the days to come. Whilst there is still no district to order a curfew aimed at curbing the spread of the coronavirus, this may easily change soon, should the situation remain out of hand.



As the coronavirus forces the cancellation of countless events, businesses are finding themselves assessing both their losses and their remedies. Suddenly, that boilerplate language in the fine print of contracts discussing responsibilities arising from a spread of disease has taken on a whole new level of importance. Understanding what the meaning of the definitions and the provisions afforded to organizations can make the difference between an unmitigated disaster and a business saving reprieve.

As it is widely discussed on various previous occasions and needs no further explanation, Property Damage and Business Interruption policies can be triggered only on grounds of an actual physical damage to the insured property. This can hardly be the case with the coronavirus, hence business owners cannot rely on their losses being compensated due to the above mentioned reasons.

Many businesses will be wondering if they are insured for the loss of income suffered due to the virus outbreak. Business interruption coverage is triggered when a covered peril causes damage to covered property. The damage must be sufficient to render the property unusable in its current state. A standard policy would cover lost business income if operations are interrupted because the manufacturing facility is destroyed by say fire. Coronavirus-related claims are unlikely to cause the property damage needed to trigger business interruption coverage. Even if facilities (offices, warehouses) or inventory (raw materials, production) are rendered unusable by coronavirus contamination, business interruption coverage would be unlikely because standard policies typically contain exclusions for bacteria, viruses and other pollutants.

Still, here is a rough overview of the three main areas where cover may or may not apply:

•        some policies will offer cover if your business has to shut due to having an outbreak of the virus on site. The cover would usually include loss of income for the c. two week downtime, a full decontamination of the site, and financial help for rebuilding your brand.

•        unfortunately this is unlikely to be covered

anywhere. It is similar to having a bad recession and customers / clients not coming out and spending money. There is an argument to say there is a good reason why customers are no longer spending money, but most insurers would not offer cover for something like this.

•        Some policies may cover you if your business has been told to close by the Government, but only a small percentage. Often where there is cover, it is for specific illnesses and the issue is that Coronavirus will not be listed due to

being brand new. However, some policies specify ‘notifiable diseases’, and in these cases you could be covered.

Some of the reason why insurers do not offer these covers is because the Government will often step in to help financially, and indeed for a large number of them there plans for making particular grants available- business rates to be taken away, an agreement to meet 60% of the wage bill etc. Depending on how long the shutdown lasts, this could well cover all of the business’s losses. Naturally, these measures are taking time to filter through and it puts tremendous stress on cash flow, but hopefully these will be available soon to try and ease the stress.

Another reason why these covers are rare is because insurers would not be in a financial position to pay out claims in these situations as nearly every business is now in a position of having reduced income / profits, and if a substantial percentage of their customers needed a pay-out, the insurers would simply not be able to pay.



Liability for negligently exposing others to coronavirus can be a devastating threat to all businesses in the given situation. Commercial general liability policies would likely respond to third-party claims regarding the negligent release of or exposure to coronavirus. Despite the potential for limited insurance coverage, it’s worth noting that commercial insurance policies are not designed to cover the spread of contagious diseases like coronavirus or the flu. And, depending on the severity and duration of the virus outbreak, insurance companies are likely to add exclusions that eliminate the possibility of any coverage for coronavirus claims. As a result, most businesses will not be able to rely on their standard insurance policies to adequately protect against coronavirus-related losses.

To better understand the new Government-imposed responsibilities and liabilities, businesses need to well read through the text of the ordinance of the Health Minister:



There are important items to be considered and acted upon:


#1: Close down properly

The Government ordering a shutdown would have undoubtably been a stressful moment for all those who own or run such a business, and hopefully they would have all taken the time to ‘close down’ appropriately, but one final thing to do is inform their insurance company of the closure.

Normally, policy wordings will include a clause regarding unoccupied properties, often making no changes in cover or conditions for the first 30 day. However, most insurers will also consider the fact that the property has been closed to be a material fact that they need to be aware of, so it is imperative that insurers are informed of the closure as soon as it happens.

Most insurers will probably be very understanding of the situation all find themselves in, and if businesses speak to them and make an agreement then all should be fine, but if they do not and there is a loss while a property is empty, this may well give rise to issues and businesses may find a claim not being paid.

If the shutdown businesses rent their premises then they should pass this information on to their landlord as the latter will need to take the same action to ensure the cover for the building remains in force.

 #2: Care for the employees

Despite all efforts to contain the outbreak, the coronavirus is continuing to spread. Businesses should assess their risk of exposure or infection to understand the proper precautions to take. In light of disease’s severity, they need to develop a checklist to help prepare for potential illness and slowdowns in business and supply chains.

•      Encourage sick employees to stay home. Suspend requirements for notes from healthcare providers — those offices are likely to be extremely busy, and it’s better to keep those with the virus away from others. Employees should not return to work unless they are free of a fever without the use of medications to reduce the fever. Extend sick leave so that employees do not feel impelled to come to work because they have bills to pay.

•       Separate any employees that arrive at work with a respiratory illness or develop one during the day and send them home immediately.

•       Encourage employees to work remotely if they are able to.

•        If remote work isn’t possible, allow employees to stagger shifts.

•        Allow employees to stay home to care for ill family members. People can have the virus and not have symptoms; those with ill family members could have it as well and not know it.

•        Provide tissues and no-touch trash cans; post hygiene reminders.

•        Perform routine cleaning of the office (weekly). Ensure that surfaces are wiped down.

•       Assess staffing — what work is critical, and which employees can do those tasks. Unless required to work together, consider separating them so there is less chance of all critical employees getting ill at once.

•        Provide disposable wipes so that commonly used surfaces (doorknobs, desks, keyboards, etc.) can be regularly wiped down.

•        Reconsider employee travel; limit it to what is essential. Schedule video conferences or use other remote conferencing technology. Advise employees to have plans in the event of getting stuck in an area that becomes quarantined because of the virus.

•        Encourage employees who become ill while traveling or on temporary assignment to contact their supervisor and medical provider if needed.


#3: Protect your business from fraudsters

Global criminal organizations continually scour the news for potential fraud schemes. Fear and confusion create a climate ripe for fraud. And companies with deep pockets are prime targets. There are some potential schemes businesses should prepare for and be on the lookout for communications (e.g., emails or texts) that seek to dupe employees and contain phishing or exploitation content. The communication may say something about coronavirus and then request employees to take specific actions. For instance, already spreading are false messages with the following text:

 “All employees are asked to sign in (see hyperlink) and update their wellness status.”

#4: Premium Payments

All insurers are reacting differently to businesses who are struggling to afford their insurances. The main concern for businesses should be keep being covered during this terrible time, as an uninsured incident while already in this awful position would be a terrible thing.

 If there are businesses that are struggling to meet their monthly payments, or are concerned that the renewal is coming up soon and they won’t be able to afford to pay, then they should raise the issue so options can be talked through, and negotiated with insurers.



Each new, unforeseen ‘black swan’ event highlights valuable lessons for businesses and risk managers about how to respond. The coronavirus outbreak is no exception. Based on what is known so far about the disease, we can already draw some general conclusions about how such events should be addressed in the future.

When it comes to threats like the disease outbreak, businesses stand a better chance of surviving and recovering when management is prepared to address it head on. This applies not only to businesses with operations in challenging locations, but to businesses anywhere in the world. Because of the coronavirus outbreak, travel and business operations throughout the world are already being significantly impacted, even in countries that have not yet recorded any official cases of the virus. To be prepared for such an eventuality, businesses should consider implementing the following general practices:

•    Establish specific protocols that should be followed when local, national or global health emergencies occur, including what sick employees should and should not do when infected. This may even apply when someone has a cold, to avoid making other employees sick.

•       Assign specific individuals in advance to address the inevitable issues related to an out-break and empower them to act, consistent with the above-referenced protocols.

•       Do not penalize employees for bringing health-related issues to management’s attention.

•       Obtain requisite forms of business interruption and related coverages and ensuring that they are current and adequate to account for up to medium-term interruptions.

•       Establish corporate procedures or relocating employees and replicating their workflow at another location.

•       Identify alternative business operations, customers or sources of supply in advance that may be implemented on short-notice.

•       Create a standby budget for such emergencies that can be utilized at a moment’s notice.