A Conversation With ... Mark Acre

What are some of the most common questions you’re receiving from business clients related to COVID-19?
Clients are asking if there’s coverage for, let’s say, one of their employees gets (COVID-19) and has a massive health claim. They’re concerned with how insurance policies cover pandemics. And then, of course, when clients are forced to close the doors or they see a loss in revenue, they’re asking are there other options for us that allow us to not pay premiums.

As some employers keep their workforces at home due to the pandemic, what insurance is needed for remote work?
We’ve had a spike in questions on that. With relation to cyber liability coverage, in today’s world, most of our businesses have cyber liability to cover them in the event that there are systems that were hacked and client information was stolen or used inappropriately. I’d say 60%-70% of the time our clients are purchasing that type of coverage to protect their business. But we’re seeing clients who have said no in the past come to us and say, “Maybe we’ve got to rethink this.”

Does a business need certain safeguards in place to be eligible for that coverage?
No, it’s offered to everyone. If you’re a construction company and you have subcontractors logging their invoices through some app or internet-based site, that’s not as risky as if you’re a financial adviser who has a server that has Social Security numbers and income statements readily available to someone if they were able to hack the system. Premiums are adjusted based on the level of risk to a particular industry. And, of course, they ask the questions: Do you have a VPN? Do you have a firewall?

As employees return to the office and employers create safe environments to prevent the spread of COVID-19, what liability are owners opening themselves up to if a customer or employee contracted the disease at the business?
A business insurance policy doesn’t provide any type of coverage for that. And that’s something that we’ve had to deal with for our clients and even ourselves. In our practice, we have 26 people or so that would come and go out of our business. If one of our employees were to get it and give it to somebody else and they were to have a hospital visit and a major claim from it, there’s no business insurance policy to cover that type of pandemic outbreak in your office. Insurance companies are revisiting that and working to find ways that they can provide that type of protection for businesses. I’ve sat on many conference calls over the past three or four months of what we should do as advisers, what I should do as a business owner. As far as litigation is concerned or having to defend yourself in a claim, it’s become apparent that it’s virtually impossible to pin down where a person got it. The burden of proof would be on the person who got the virus.

What other trends are you watching in 2020?
On the auto and home insurance side of things, we’re seeing a move to utilizing technology to determine rates and moving to a pay-for-use model when determining insurance rates. When you first apply for auto insurance, one of the questions is how many miles do you drive a year? That will affect your insurance rate. The insurance companies ... you’ve seen them put smart devices in cars and apps on your phone. They’ll measure hard breaking, measure how fast you’re accelerating and measure if you’re using your phone while you’re driving. And they’re offering up to a 40% discount for auto insurance rates if you will put that on your phone. Some will penalize you for driving too fast. But we’re also seeing a model being introduced of pay per use for insurance. I could see a time in the next six to 18 months where insurance companies will measure how many miles you drive, and you pay for the use that you drive. It’s not just a bland number that you pay $100 a month. You may pay $60 this month and you may pay $120 next month.

Mark Acre can be reached at mark.acre@onesourcegroup.net.