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Risk Management

Protecting your changing business operations in a pandemic

workers doing inventory

Even businesses with the best-laid strategic and tactical plans are likely to have their operations impacted by an unforeseeable and challenging world event such as COVID-19—which has prompted responsive, dramatic, and sometimes hurriedly made changes to business operations, as well as uncertainty about the future.

In the wake of the coronavirus shutdowns, a recent survey taken by Chubb and the National Center for the Middle Market (NCMM) shows that the vast majority of mid-sized businesses (86%) felt that COVID-19 had an immediate negative operational impact, and 51% felt that uncertainty was the most difficult aspect of the pandemic1.

One definite certainty in any crisis — and a safeguard for the future — is the need to mitigate the potential risks that arise from rapid changes in business practices and procedures.

Your insurance agent or broker can provide valuable insights when assessing and managing these risks; here are three key areas you’ll want to review.  


Workforce adjustments

Changes in where, if, and how employees work can impact business exposures.

  • Work from home employees.
    • Cyber security risks may increase when employees are working in new ways, using unfamiliar software and online platforms. Limit the risk of a security breach when operating with a remote workforce by implementing strong cyber security practices and clear work-from-home policies.
    • Remote employees are still covered by workers compensation, while in the scope of their job duties, and there is a possibility that claims may increase for carpal tunnel or back pain due to improper workspace set-ups or excessive work hours. Provide employees with best practices for setting up an ergonomic workspace and maintaining healthy work-life balance.
  • Shifting staff sizes and duties. Sixty-four percent of businesses anticipate that employment levels will undergo long-term shrinkage due to Covid-19, according to the survey, while other companies are growing. The way in which staff reductions are implemented (furlough, reduced shifts, layoffs); how many and what type of workers are brought on (increased number of shifts, part-time workers, etc.); or changes in employee duties may impact workers compensation insurance needs. Make sure to discuss any workforce changes with your insurance agent or broker so you can make the necessary adjustments to your policies.
  • Third-party vendors. As always, when contracting with third party vendors to provide services of any kind, it’s critical to carefully vet them for quality and safety practices. Ask your insurance agent or broker for guidance; your insurance company may be able to provide information or access to a network of reliable, trustworthy service providers.


Shuttered buildings and operations

If you have shut down your building or equipment, make sure you have taken the appropriate defensive measures.

  • Taking manufacturing offline. There are a great number of safety concerns associated with the shut down and start-up of manufacturing processes. Adhere to engineering, regulatory, and safety best practices to minimize your exposures.
  • Vacating a plant or office building. Prepare for the property threats inherent to an empty building, which include break-ins, building systems and plumbing failures, and possible injuries to any skeleton crew members still required to work. Check with your insurance agent or broker to confirm whether your property and general liability insurance accounts for the increased risk caused by these factors.
  • “Grounding” a fleet of vehicles. A reduction or change in the use of your business vehicles could affect your automobile insurance needs. You should also review your policy in the event your employees need to use their personal vehicles for business-related transport to make sure that you have appropriate non-owned and hired auto insurance.


Supply change management and operational repurposing

Changes in how you’re conducting business and using your operations and facilities can necessitate changes to your insurance policies and risk management program.

  • Supply chain risk. Twenty-seven percent of businesses surveyed by Chubb and the NCMM anticipated the COVID-19 pandemic would create supply chain disruptions, and such disruptions have indeed been widespread. An effective business continuity or recovery plan is an important tool in protecting against a disruption in your supply chain. Your insurance agent or broker can help you determine the types of insurance you may need to manage the risks.
  • Increased online transactions. If you’re transacting more business online, you’re also increasing exposure to cyber security incidents that may not be insured under your current commercial insurance policy. Guard against the fallout of customer data theft and other malicious system breaches, which can wreak havoc in already stressful times, by making sure you have the necessary cyber risk insurance and proactive response planning.
  • Operational repurposing. In times of community need, it’s admirable to convert an operation to manufacture Personal Protective Equipment (PPE), to open a parking lot for medical screening, or to loan company trucks or cars for vital equipment transportation or food deliveries. But remember to also review and plan for any potential auto, property and liability exposures.


1 “Covid-19 and the Middle Market”, a 2020 survey conducted by Chubb and the National Center for the Middle Market (NCMM).


This document is advisory in nature and is offered as a resource to be used together with your professional insurance advisors in maintaining a loss prevention program. It is an overview only, and is not intended as a substitute for consultation with your insurance broker, or for legal, engineering or other professional advice.

Chubb is the marketing name used to refer to subsidiaries of Chubb Limited providing insurance and related services. For a list of these subsidiaries, please visit our website at Insurance provided by ACE American Insurance Company and its U.S. based Chubb underwriting company affiliates. All products may not be available in all states. This communication contains product summaries only. Coverage is subject to the language of the policies as actually issued. Surplus lines insurance sold only through licensed surplus lines producers. Chubb, 202 Hall's Mill Road, Whitehouse Station, NJ 08889-1600.


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