The Impact of COVID-19 on P&C Claims and Insurance Placements

By Alliant

COVID-19 has had a significant impact across all lines of business and all aspects of our lives during the past two years and counting. However, its effect to date has been less severe for financial institutions and their corporate property and casualty (P&C) insurance placements, but has brought changes to how insurance companies are approaching certain policies.

Most financial institutions had previously established business continuity plans that were put to the test during the COVID-related shutdowns. Financial institutions and other businesses mainly experienced losses related to business interruptions during such shutdowns, but the general exclusionary language for viruses and other diseases under the “Communicable Disease” exclusion has precluded payments by P&C insurance carriers for such claims.

The COVID-19 pandemic has triggered changes for how financial institutions are operating and managing their employees by switching to more automated processes, making significant investments in technology, and allowing employees to work remotely. This evolution into a hybrid work environment has demonstrated a positive impact on employee morale and driven down the number of Workers’ Compensation claims (significantly!), which has correlated in lower Workers’ Compensation rates. While we have seen a decrease in Workers’ Compensation losses, there have been claims made resulting from remote work at home, and there continues to be an ongoing debate over whether they are compensable under a Workers’ Compensation policy. These Workers’ Compensation claims are subject to further review by the insurance carriers in order to achieve a better understanding of what is defined as compensable under the individual state statutes. Insurance carriers are also looking to adjust their job classification for employees working from home on a full-time basis or a hybrid arrangement, subject to individual state statutes. To make sure they are covered appropriately, financial institutions should also examine their employees’ job categories (i.e., Clerical versus Salesperson) as there may be an impact on premiums during this transition to a more hybrid work environment. Employers should also track remote employees’ work locations in an effort to ensure appropriate statutory Workers’ Compensation coverage is filed in each state where employees work/reside, in order to avoid fines and/or penalties and to potentially benefit from any positive premium relief.

The automobile insurance industry has also experienced a significant drop in losses during the pandemic and even returned portions of insured’s automobile premiums in 2020. However, while the number of automobile accidents were reduced, the percentage of fatalities increased. Given the growth of drivers who are back on the road and the increased percentage of driving accident fatalities, insurers are again pushing to increase automobile insurance rates.

As we collectively enter another stage in the COVID-19 pandemic, Alliant is continually reviewing the exposures for financial institution clients in order to address any potential gaps in coverage, especially given the increased inflation for products and labor. We strongly encourage all financial institutions to examine a few key areas of their risk management plans and insurance policies:

  • Enhance and/or implement business continuity plans as they are critical to minimizing loss related to business interruption
  • Conduct an annual Workers Compensation audit, which is particularly important as workplaces transition to hybrid or full-time remote work options. Be thorough in determining individual employee job classification and split between work and home
  • Reevaluate property and other asset values for limit adequacy, including assets located away from scheduled offices in an effort to provide coverage for employee remote workstations
  • Prioritize business protocols for third party office visits, client events and work-related travel should continue to be a high priority. Even though there is some exposure for liability from third party visitors, signed waivers act as a deterrent and mitigate such risk
  • Review Business the benefits of a Business Travel Accident policy and address any enhancements (e.g., out-of-country medical coverage) as travel appears to be on the rise. Check to see if your insurer has added COVID-related exclusions to General Liability insurance policies


While COVID appears to be waning, the threat of new variants and/or a new virus altogether causing disruption is still very much on insurers’ minds. Taking the steps above can help make sure you are covered with the policy changes we are currently seeing and help prepare for the future.