EPIC Risk Advisory Bulletin
Volume 1, Issue 22
In this issue, we take a focused look at:
- Supply Chain and Business Risks
- Entertainment Industry Update
- Looming Transportation Deadlines
- Truckers Keep America Rolling
- Insurance Products and Coverage Information
- News of Note
- Human Resources and Employee Benefits
- Coronavirus Resources for the Fall
- CA Workers’ Compensation Law Advanced
- Workers’ Compensation Webinar October 1
- Preparing Office Ventilation Systems for Workers
The information presented here is intended to provide a high level overview of critical areas of concern for businesses around coronavirus. Consult your EPIC insurance broker for more in-depth guidance.
Supply Chain & Business Risks
Entertainment Industry Update
The coronavirus pandemic brought worldwide film, TV and live event production to a halt in March. In the six months since, some corners of the entertainment industry have attempted fitful openings, while others, like theater and live music, remain shuttered.
Hollywood Remains Optimistic
In California, Hollywood has made slow, but steady progress toward reopening its production facilities. Film commissioner Colleen Bell is optimistic about a return to normalcy in California, where all series shooting was shut down in March. In mid-June, unions released extensive return-to-work guidelines for resuming film and TV production.
As A-list actors and crew members fall prey to the virus, concerns abound over safety. Many projects, however, have moved forward with substantial pre- and post-production work. While much of this work can be done remotely, some physical production activity is beginning to resume. Smaller-scale film projects and TV shows like game shows and soap operas have been able to start up safely again. The Film and Television Tax Credit Program is luring production away from other cities (New York) and countries (Czech Republic) and bringing them to California. Local permit applications are up as well.
Two firms have released COVID policies for production companies anxious to resume activity without shouldering all the risk. However, the policies, which are in short supply, are very expensive and limited.
Film and TV Production Around the World
The virus has wreaked havoc on film and TV production schedules. Producers have had to adjust where they film as some nations have opened in limited fashion, while others remain closed. A number of governments around the world have established compensation funds to help production companies struggling from shutdowns caused by coronavirus. As part of the only worldwide Entertainment and Sports network, EPIC’s Entertainment Practice is tracking and documenting these schemes by country.
In Canada, domestic film and TV projects that had production insurance before the pandemic have been able to move forward with protocols in place. New productions that have not been able to secure coverage have been postponed or have proceeded with significant risks. The U.K., which began shutting down productions in March, has seen activity resume, albeit cautiously, over the past two months. Its establishment of a $647 million insurance fund for TV and film production at the end of July is helping fuel activity.
Production restarted in France in May after the government approved new safety guidelines for filming. Local productions continue, but recent outbreaks there have put a halt to any international productions that were filming. The government set up a temporary indemnity fund of 50 million euros in May for canceled or postponed film and TV shoots.
Iceland is open for business, with the local film and TV production business spared delays. There, local productions are all covered by insurance. Film and TV production resumed in China, the first country impacted by coronavirus, in March. Theaters opened up in late July. Many small companies have suffered damage from tax code changes and a move in the country toward patriotic films celebrating China’s history and success are discouraging foreign film production there. Companies filming in China bear most production risk themselves.
India has become the new epicenter for coronavirus infections, which has resulted in many negative impacts, including a complete standstill of film production. There is currently no film insurance coverage tailored to coronavirus in India. New Zealand, on the other hand, has seen a resumption of many productions, including “Avatar.” Foreign production applications have surged on account of the country’s robust infrastructure and effective virus management.
In nearby Australia, the government announced a $36 million Temporary Interruption Fund (TIF) to provide support for productions in the absence of insurance coverage due to coronavirus. A number of productions have resumed there.
Theater Owners and Film Producers Sue, Venues Remain Closed
In the theater corner of the entertainment industry, venues remain closed and cast members out of work. Litigation activity has been up as owners seek recourse for lost business.
After Gov. Cuomo of New York shut down theaters in March and then closed all nonessential businesses, arts institutions of all kinds filed insurance claims for business income loss. But the insurance industry has issued a torrent of denials, arguing that its policies never promised this kind of coverage in the first place and that fulfilling all of these requests would bankrupt the industry.
Jujamcyn Theaters, the operator of five Broadway houses, has sued its insurers for denying it millions of dollars that the theater company says it deserves as payment for losses suffered during the months long coronavirus pandemic shutdown.
The lawsuit, filed in the U.S. District Court for the Southern District of New York on Tuesday, is the latest challenge to the insurance industry’s refusal of coverage for the deluge of business losses experienced during the pandemic.
According to the New York Times, the lawsuit, which accuses both Federal Insurance and Pacific Indemnity of a breach of contract, part of the reason that Jujamcyn’s business income insurance claim was denied was because the governmental orders did not prohibit access to the theaters, meaning theater employees were not barred from entering and checking on the buildings.
In the film industry, producers of an upcoming film starring Ben Affleck have sued their insurer for refusing to extend their policy to account for the coronavirus pandemic. The lawsuit is an early test of whether film insurers will be forced to accommodate delays caused by the pandemic.
The policy in question was issued last October and did not carry a coronavirus exclusion. However, it also has an expiration date of October 28, 2020. Now that the film will not be able to wrap by deadline because of delays caused by the virus, producers are seeking an extension. The insurer is unwilling to accommodate their request.
Live Events Remain Largely Cancelled
Live music venues continue to be severely affected by the pandemic. While performers have found some relief through online streaming and creative screenings of live performances, restrictions of large public gatherings have caused touring companies, event promoters and concert venues to incur significant revenue losses.
In many cases, there could be no recovery. A study in June by the National Independent Venue Association found that 90 percent of independent venue owners, promoters and bookers believe they will have to close permanently if they don’t receive targeted aid.
South by Southwest, a large music festival, was forced to cancel this year. Afterwards, its founder said it did not have insurance coverage for the virus and had to lay off one-third of its employees.
The Restart Act, which was proposed in May, aims to provide targeted assistance to small businesses with more flexibility than the Payroll Protection Plan (PPP) funding did earlier in the pandemic. The bill sponsors and supporters have businesses like independent venues in mind and hope its passage will buoy concert and live event venues and industry players across America.
When considering the entertainment industry at large, it is clear that the outlook for many corners of it remains uncertain. Coverage terms and language are critical for protecting against the high likelihood of interruption. The insight and assistance of a knowledgeable broker will prove essential in the months ahead.
For more information about coverage for your specific situation and production schedule, contact an EPIC broker.
Transportation Deadlines Loom
Congress faces two big transportation deadlines on September 30 – and significant consequences if it does not act. The lawmakers deadlines face include extensions of the:
- Payroll Support Program, which would allow airlines to keep employees on their payrolls, despite decreased air traffic. The program is currently set to expire on September 30.
- Current highway and transit law, which is funded by the Highway Trust Fund. Authorizing laws can extend past the September 30 deadline, but unless Congress takes action, the fund will run out of money.
Transit agencies across America continue to feel the effects of the pandemic, with steep declines in ridership as many passengers work remotely, are out of work or avoid mass transit systems.
The HEROES Act, which was passed in May by the House of Representatives, proposed $15 billion for state departments of transportation and $15.75 billion for transit. The House and Senate now appear far apart on how to proceed with addressing transportation funding needs. The House passed a $494 billion transportation bill on July 20, but Senate Republicans have indicated no desire to move on it.
It is looking increasingly unlikely that legislation will pass ahead of the upcoming presidential election. Some have argued that economic recovery will be more difficult without substantive funding for transit and transportation needs. In the meantime, the state of the nation’s highways and airline industry remain up in the air.
For more information on how these events may impact your operations, contact an EPIC team member.
Truckers Keep America Rolling
As the American economy continues to limp along under the ongoing effects of the coronavirus pandemic, much of life and work has shut down. One segment of the population that has kept things moving, however, is America’s truck and delivery drivers. As they work hard to keep needed items arriving to supermarket shelves and doorsteps, it is an appropriate time to mark National Truck Driver Appreciation Week (NTDAW).
Occurring September 13 – 19, NTDAW is an opportunity to honor the 3.5 million drivers for their hard work and commitment in one of the country’s most demanding and essential jobs. Any gesture of appreciation on our parts will be appreciated by those drivers logging miles to bring us the clothes, food and other essential items we need to keep our lives moving.
Insurance Products & Coverage
News of Note
The passage of another two weeks has brought forth more developments across the insurance world. Here is a rundown of recent news stories of interest.
- How employment practices insurance policies are responding to COVID-19, Daily Business Review, Sept. 10
- COVID-19 workers’ comp claims are being held up or denied, The Intercept, Sept. 7
HR & Employee Benefits Insights
Resources for the Fall
EPIC has gathered the following helpful resources from the CDC to help guide safe activity in the months ahead.
- Attending an Event or Gathering – Prepare ahead of time by checking with event organizers and venues for updated information about any coronavirus safety guidelines. Practice social distancing and limit physical contact, wear masks and limit contact with frequently touched surfaces.
- Practice Proper Masking Procedures – Knowing how to select, wear and clean a mask can help prevent the spread of coronavirus. Masks are recommended in public settings around people who do not live in your household and when six feet of distance cannot be maintained between individuals.
It is also a good idea to continue to routinely monitor states’ Closure and Reopening Orders as well as Orders and Guidance to Screen Employees for Coronavirus.
For additional information and resources, contact an EPIC team member.
CA Workers’ Compensation Law Advanced
California lawmakers passed legislation on August 31 that would extend the governor’s executive order making it easier for essential workers to receive workers’ compensation benefits if they contact coronavirus on the job.
Senate Bill 1159 passed the state Assembly 69-4 and the Senate 30-8 with amendments. The bill first passed the state Senate in June and states that it will be presumed that workers acquiring coronavirus within 14 days of working onsite at an employer’s direction were exposed to the virus at their workplace.
The legislation places the burden of proof upon employers to provide evidence that workers did not contract the virus at their place of employment. Employees with paid sick leave must exhaust those benefits before temporary disability benefits are paid. Employers have 30 days to reject coronavirus claims and claims not rebutted within that time frame will be presumed compensable.
Workers covered by the legislation include firefighters, police, health care workers who provide direct patient care, nurses, EMTs and in-home care workers. If the bill becomes law, the legislation would take effect immediately and remain in force until January 1, 2023.
For more information on how this legislation may affect your operations, contact an EPIC team member.
Workers’ Compensation Webinar
EPIC Insurance Brokers and Consultants is hosting the Workers’ Compensation Insurance Rating Bureau of California (WCIRB) for a webinar on October 1 at 9:30 a.m. PST. In this 60-minute webinar, listeners will get an update on the changes to workers’ compensation rules brought about by the coronavirus, and how to apply them.
Preparing Office Ventilation Systems for Workers
With Labor Day in the rear view mirror, employers and workers across the country are turning their attention to the workplace. Companies that directed their employees to work remotely through the summer months may now be considering bringing them back to the office in staggered shifts and limited capacities.
Employers should adhere closely to guidance provided by OSHA and the CDC. One area of particular importance involves preparing indoor ventilation systems and implementing engineering controls to prevent the spread of coronavirus. In addition to important steps like handwashing, masking, disinfecting surfaces and social distancing, proper indoor ventilation is critical in preventing coronavirus infections.
Over the past six months, researchers have learned that coronavirus is transmitted through the air among people with prolonged exposure to it. Recommended mitigation steps include ensuring that ventilation systems operate properly. HVAC systems that have been shut down or placed on setback should follow startup guidance provided in ASHRAE Standard 180-2018, according to the CDC.
Circulation of outdoor air should be increased as much as possible, and can be accomplished by opening windows and doors, when possible, and using fans. Additional resources for employers are available from the National Safety Council
For more information or resources, contact an EPIC team member.
Conclusion
Our understanding of coronavirus and its impact around the world continues to evolve at a rapid pace. This newsletter briefly touches on issues that businesses may want to consider as they approach their response to novel coronavirus. More topics will be considered in future issues as our understanding of the virus and its impact continues to evolve. Please reach out to your EPIC broker for more information.
For all of EPIC’s coronavirus coverage, visit epicbrokers.com/coronavirus
Disclaimer: This has been provided as an informational resource for EPIC clients and business partners. It is intended to provide general guidance on potential exposures and is not intended to provide medical advice or address medical concerns or specific risk circumstances. Due to the dynamic nature of infectious diseases, EPIC cannot be held liable for the guidance provided. We strongly encourage readers to seek additional safety, medical and epidemiological information from credible sources such as the Centers for Disease Control and Prevention and the World Health Organization. Regarding insurance coverage questions, whether coverage applies or a policy will respond to any risk or circumstance is subject to the specific terms and conditions of the policies and contracts at issue and underwriter determinations.
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