Podcasting is an industry that has been experiencing steady and consistent growth since it began in the early 2000s. However, once lockdown occurred due to COVID-19, the space began rapidly growing, and now each week, more Americans listen to podcasts than own a Netflix account.
Sanford E. Warren Jr.
Intellectual Property – September 2022
Like all other creative and expressive works, copyright law is especially relevant for podcasts. It is important that podcast creators know both how to avoid infringing on someone else’s copyright as well as how to protect their own work. Doing so can help creators know what material is usable, the conditions under which the material is usable, and how to properly acquire the rights to use that material.
What Is a Copyright, and How Do You Acquire One?
As with all forms of media, copyright law is important to keep in mind and watch out for. Copyright law allows you to protect your media from being stolen and also prevents you from freely using whatever sound bite, musical piece, or written excerpt that you would like to use in your podcast. However, not everyone knows what a copyright protects or the limits of its protection.
To begin with, a copyright cannot protect an idea. For example, you cannot copyright the idea of a true crime podcast, nor can you attempt to be more specific and copyright the idea of a true crime podcast about the Zodiac Killer. You can, however, acquire a copyright on your own expression of that idea. Your words, voice, and presentation of information are all a part of your expression of the idea and, as such, are copyrightable. Of course, this means that obtaining a copyright is important if you plan to protect your expression from those who would copy it.
Obtaining a copyright for your podcast is simple—you need only have an original expression of an idea or original take on a subject and reduce it to a tangible media, such as a recording or script. Since 1989, this process has been automatic, and as long as you have done that, you will have obtained a copyright on your work. If you wish to enforce your copyright, however, it is important to take the next step in the process and file your copyright with the US Copyright Office. This will give more weight to any cease-and-desist orders you may need to file as well as allow you to pursue damages should the case ever become a lawsuit.
How Do You Avoid Copyright Infringement?
To keep from infringing on someone else’s copyright, you must look for ways to legally use their work. This can be as simple as finding works in the public domain, licensing, and even using works in the Creative Commons (CC).
Licensing
Licensing allows a copyright holder to either temporarily or permanently transfer the rights to use copyrighted material to an individual or a company. To play a copyrighted song on a podcast, for example, you would need to obtain the license to that song from the copyright holder. Licensing often comes with some sort of condition that needs to be followed, such as in the music industry, when musicians license their copyrights to record companies in exchange for royalties or other compensation.
One thing to be aware of when licensing music is that, often, two separate copyrights are given to music: one that protects the lyrics and composition and one that protects the artist’s performance of the music. These copyrights can be owned by separate entities, and as such, it is important to license from both parties when this is the case.
Creative Commons (CC)
Licensing can be a tricky or lengthy process to navigate, so people often turn to the CC when using copyrighted material instead. The CC is an open licensing standard wherein a license can be obtained quickly and easily by simply following the terms set forth in the CC license. In this way, you do not have to go to the copyright holder directly—instead, find the licensed material on the CC website—and then you can use their material for whatever your purpose may be, so long as it does not violate the terms of the license.
As such, it is important to read the license before using the material, as some CC licenses have stipulations such as needing to give full credit to the copyright holder or not being allowed to use the work in order to make a profit. The amount of time and negotiation this saves makes using works licensed under CC a very popular way to use copyrighted material.
Government Documents
Works created by federal employees, as a part of their duties, are not protected by copyright. This does not always apply to state employees; however, in some cases, it can. Additionally, works created by private individuals who are contracted by the government do not fall under the blanket of government documents and, as such, are usually protected by copyright. In general, those who can speak with the force of law cannot hold a copyright on their words. As an extension of this, laws are never protected under copyright, as held in Veeck v. Southern Building Code Congress International, Inc., 293 F.3d 791 (5th Cir. 2002).
Public Domain
Works that exist within the public domain may be used without obtaining the permission of the copyright holder. There are a few instances when a work may be in the public domain, but the law has changed over the term of some copyrights, so it can be tricky to navigate.
The first of these instances is when the copyright on a work has expired. This can happen to works published (as of January 1, 2022) in 1926 and earlier, as well as those whose copyright has not been maintained in the way that was necessary before the change in how a copyright was obtained in 1989. Prior to 1989, copyright protection was not automatic. If the term in which a work was originally published occurred between 1926 and 1964, then copyright protection needed to be renewed on the 28th year after the original publication. If this did not happen at that time, then the work fell into the public domain. After this period, between 1964 and 1989, works had to be submitted with the necessary copyright notice to be protected. If this was not done, the work also fell into the public domain. After 1989, copyright protection became automatic, and the term length is generally the life of the author plus 70 years. Works made for hire, however, have a copyright term that is the shorter of 95 years since publication or 120 years since creation.
Unpublished works have some similar rules and some rules that are quite different from those that apply to published works. For starters, unpublished works generally follow the same standard as published works, where the copyright protection lasts for the author’s life plus 70 years. However, this is not always true. If the work was written before 1978, then it was protected until the end of 2002 and is currently part of the public domain. Unpublished works that were published between 1978 and 2002 have had their protection extended until the end of 2047.
Finally, unpublished works published in 2003 or later have the general term of the author’s life plus 70 years. This means that any work that remained unpublished until 2003, for which the author died in 1952 or earlier, is currently part of the public domain.
Finally, copyright holders may dedicate their work to the public domain. This is a rare occurrence, but it can still be done if the copyright holder chooses to do so.
What Is Fair Use?
If you are looking to start a podcast, you have likely heard the term “fair use.” Fair use allows for copyrighted content to be used without permission if the use is “transformative.” The word transformative is very open- ended and subjective; however, some general guidelines can be provided.
The first thing about fair use that must be understood is that it is a defense against claims of copyright infringement. This means that you must be brought to court for a judge to provide a definitive answer on whether a particular use is considered fair use. Next, fair use is generally used to refer to the use of copyrighted material in commentary, news reporting, criticism, parody, teaching, or research of said copyrighted material. When considering whether a use is fair or not, there are four separate factors that are considered.
The first of these is the purpose and character of the use. An example of this is playing a portion of a song, then pausing and making an analysis and commentary on what is being played. This first factor relates back to the use cases—in this case, you are making a commentary or analysis—and relates the context of the use in your work to how your work adds on to, changes, or sets itself apart from the original material. If the commentary you provide after listening to a portion of a song is just to say, “That was good,” then your use is likely not considered fair use. However, if your commentary includes the emotions a song is making you feel as well as what about the music makes you feel that way, your use is much more likely to be considered fair use.
The second factor concerns the nature of the copyrighted work. This considers the amount of protection that would be given to the original material. This allows for fiction works, which are composed of creative worlds, ideas, characters, and plot lines that originated with the author, to have more protection for their material than nonfiction works, which are composed mainly of facts or analysis of those facts. While the nonfiction writer’s original analysis is certainly protected, the facts or situations they are analyzing are most likely not.
The third factor to consider is the amount and substantiality of the portion being used. For example, a 10- second clip from a 3-minute video is much more likely to hold up under fair use than a 2-minute clip from that same video, but there is no set timer or amount of a copyrighted work that always constitutes fair use.
Finally, the last factor considered is the effect of the use on the potential market for the copyrighted work. The best way to think about this factor is to ask yourself: “Is my use of the material going to provide a way for people to circumvent seeking out the original material?” If so, you are likely driving people away from the copyrighted work and harming its potential market.
Common Misconceptions
Many people believe, likely because of either fair use or the terms in CC licenses, that there are times when a use cannot be infringing. However, as discussed, fair use relies heavily on the context of the use, and CC licenses can have a variety of terms. These beliefs boil down to three common misconceptions about copyright infringement.
The 30-Second Rule
The 30-Second Rule is the idea that if you use 30 seconds or less of a copyrighted work, then your use does not infringe on the copyright. This, however, is not true. It is easy to see where this belief came from because, in some instances, fair use can protect your use of 30 seconds of copyrighted material, but it is all about context. Any use of protected material can be infringing, even if that use is under 30 seconds. For example, if the original source is a musical jingle that is only 15 seconds long, then using the whole 15-second jingle as the opening to your podcast without obtaining the license to the material would certainly be an infringing use.
The Credit Rule
Many believe that simply crediting the copyright holder is enough to be free of infringement, though this is just another myth. Again, it can be seen where this idea comes from, given that one of the main CC licenses requires the licensee to give full credit to obtain the license; however, this applies neither to all works in the CC nor to all copyrighted material in general. Instead, it is important to make sure that you are legally and properly using copyrighted material.
The Nonprofit Rule
The final common belief is that the use of copyrighted material is okay if that use is not for profit. Once again, this is false—another belief likely left over by a different common CC license term. This can be disproven rather simply by a somewhat common occurrence. If the licensing term on an educational booklet created for a nonprofit organization expired, and they continued to use the booklet without the rights to do so, whether they were aware the licensing term had expired or not, they could easily be liable for infringement.
Damages Associated with Copyright Infringement
If you are found to infringe a copyright, you may be liable for either (1) actual damages and any additional profits of the infringer, or (2) statutory damages. See 17 U.S.C. § 504(a). If the copyright owner elects to recover statutory damages instead of actual damages, the owner may recover a sum of not less than $750 or more than $30,000 per occurrence. See 17 U.S.C. § 504(c). Further, if a court finds that the copyright infringement was willful, the court may increase damages up to $150,000. See id.
Conclusion
There are many things to look out for regarding copyright when making a podcast. Music, interviews, art, and more can all be protected under copyright, and podcasts frequently use many of these different expressive mediums. However, avoiding legal issues can be as simple as getting the correct license, using a CC work, or finding something within the public domain. If you do not plan to obtain the license for something not in the public domain, be careful in your use and be aware that fair use is a defense that will be evaluated in a courtroom and could, at best, add up to a significant cost in attorneys’ fees and, at worst, you could be liable for damages for being found to infringe a copyright.
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author’s employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.
It is with great sadness that we announce the passing of Edwin W. Koetz on Saturday, April 23, 2022.
Ed will always be remembered as a man of integrity, honesty, and innovative style. Whether it was riding his motorcycle to appointments or developing one of the first computer rating systems for personal auto insurance, Ed captivated!
Ed started in the insurance business as an adjuster with The Ohio Casualty Insurance Company and handled claims for Bill Davis. When Bill offered to bring him on as an agent Ed jumped at the opportunity and sold insurance with him until Bill eventually offered to sell his agency to Ed.
Ed bought W.E. Davis in 1962 and out of respect for his mentor, kept the agency’s name unchanged. Now, the “W.E. Davis Insurance Agency, Inc.” name carries a history of over 80 years, serving the insurance needs of greater Columbus. The agency Ed took over has since expanded to provide insurance products throughout the Midwest region and nation, being licensed in over 30 states.
As an agent and owner of the W.E. Davis Insurance Agency from 1962 until 1993, Ed cemented the family approach to serving clients as a core value for W.E. Davis Insurance. When his son, John W. Koetz, received the business that core value continued strong. Now, John’s son and nephew, Nick Koetz and Mark Willis continue in the family business as well.
From Left: Nick Koetz, John Koetz, and Ed Koetz
As family members and business partners, we strive to follow in the footsteps of the legacy that Edwin W. Koetz left.
Telematics may give parents a tool to help young drivers learn safe habits.
You’re a safe driver: You follow all traffic laws, don’t speed and never allow yourself to be distracted by your phone while driving. Suppose you could take credit for your efforts and earn a discount on your car insurance? With growing adoption of telematics by insurance companies, you can.
WHAT IS TELEMATICS?
Telematics technology is a way for insurers to collect driving habit data to better assess their risk, based on individual drivers. As drivers opt in to providing data, the insurer can tailor pricing to driving behavior, rewarding drivers with good habits.
HOW DOES THE TECHNOLOGY WORK?
The approach varies by company but could involve a plug-in device installed in the car or an app downloaded to the driver’s smartphone. Telematics apps vary by company. They can be part of an insurance company’s own app or downloaded separately to be paired with the company app. When a policyholder drives, the app collects information from each trip and calculates a score based on driving characteristics such as:
· speeding
· harsh braking
· acceleration
· cornering
· phone distraction
The app accumulates information over time and produces a driving score.
WHAT DOES YOUR DRIVING SCORE MEAN?
The driving score helps insurance companies determine which drivers are less likely to be involved in accidents and rewards them for their good habits by offering a discount on their automobile insurance premiums. In some cases, participants receive a discount just for signing up for the app and are given the opportunity to earn additional discounts when they renew their policy.
WHAT’S IN IT FOR THE POLICYHOLDER?
In addition to potential premium discounts, this technology may provide peace of mind for parents with teenage drivers in the house. Some apps allow the primary policyholder, typically a parent, the ability to see the scores of their young drivers so they know if they are practicing safe habits. Parents can observe those scores and address risky driving behavior as they choose.
HOW DO I GET MORE INFORMATION?
Each company with this technology uses it differently, so give our agency a call to see if telematics are offered by your insurer. Cincinnati Insurance policyholders may choose to use RideWell, a smartphone app. Discounts can be up to 18% and if you are worried that the company may increase your rates, that can not happen. This is to help lower rates, not increase them.
Coverages described here are in the most general terms and are subject to actual policy conditions and exclusions. For actual coverage wording, conditions and exclusions, refer to the policy or contact our agency.
There might be a hidden fire hazard lurking around your home and you don’t even know it. The worst part? You probably use this item at least once a week.
It’s your clothes dryer.
According to the National Fire Protection Association, approximately 3,000 dryers catch fire each year. About one-third of those fires are caused by failing to clean your clothes dryer, leading to clogged dryer vents. These fires cause an estimated $238 million in property damage yearly.
The good news is you can quickly fix and monitor this potential danger to help reduce the risk of fire. Here’s what you need to know.
What Happens When a Dryer Vent Is Blocked?
As you dry your clothes in a dryer, little bits of lint and fluff get pulled off of them. You probably notice this when you clean out your lint trap, which is usually just inside the dryer door.
However, not all of the lint, or other things left in your pockets such as tissues, bits of paper and paper towels, are caught. Some lint is also pushed out into your dryer vent. Even if you are diligent about cleaning your dryer lint trap after every use, it won’t catch everything. If you let that accumulate in your dryer vent over time, you could run into problems.
If your dryer vent is blocked, all of this built-up lint can become a fire hazard. The heat from your dryer could cause the lint to combust, potentially catching your dryer and parts of your home on fire.
If you haven’t cleaned your dryer vent in a while there are some tell-tale signs to look for that will let you know you should check it out:
Your dryer takes much longer than a typical 45-minute cycle to dry
Clothes come out of the dryer damp
Your dryer feels very hot to the touch while running
There’s a musty odor while the dryer is on
You see a lot of lint accumulation outside the trap and vent
You should check your dryer vent once a year, in addition to regularly cleaning your lint trap. However, if you use your dryer a lot, consider checking the vent in both as part of your winter home prep checklist and again in the spring.
How to Clean Your Dryer Vent
Cleaning your dryer vent is a straightforward process that you can easily do yourself:
Unplug your dryer and pull it out away from the wall (if you can)—if it runs on gas, turn the gas off and disconnect the gas from the dryer
Get a trash bag to make cleanup easier
Using a screwdriver, disconnect the vent from the dryer
Carefully, using your hand or a dryer vent brush, pull the lint out; you can use a vacuum cleaner attachment to remove any excess lint
Once it’s clean, reattach the vent and carefully push your dryer back in; also, plug it back in and reattach the gas line (and turn the gas back on)
If you live in a house, go outside and check the vent; usually, there is a cap on it—just unscrew it and pull out the lint
Run your dryer for 10-15 minutes; doing this will push any last bits of lint down the vent and outside
Once done, go back outside and reattach the cover to the outside vent
And you’re done!
What Does Homeowners Insurance Cover?
A fire inside your home is never a good thing, regardless of where it starts. Your homeowners insurance policy could help if you have a fire due to a clogged dryer vent. Your policy could cover property damage from the fire, including replacing your dryer, as well as your potential financial liability if someone gets hurt or their property is damaged due to the fire. For example, if you have a guest staying who lost their clothes in the dryer fire, your homeowners insurance could help cover the costs of replacement.
If the fire has caused severe damage—for instance, a portion of an exterior wall in your home needs to be replaced—your policy can provide extra funds to cover a stay in a hotel until the damage is repaired.
Regularly cleaning your dryer vent can help reduce the risk of fire, but if the worst were to come, your homeowners policy can help you get back on track. Call our agency if you have any questions about your homeowner insurance coverage.
Avoid Winter Water Trouble With These Three Resources
Early Warning Signs
Cold temperatures outside can mean water problems inside. While predicting when a pipe will freeze is difficult, low temperature sensors can help. Sensors alert building owners when the indoor air temperature falls, allowing them time to act before it’s too late.
When the temperature drops, frozen pipes can turn into busted pipes, leaving your clients with costly water damage. Share this infographic highlighting steps to help prevent frozen pipes.
With snow comes the potential for ice dams – ice that traps large pools of water on roofs with nowhere to go… but inside. Check out our tips to see how your clients can avoid ice dams this winter.
This flood season is forecasted to be worse than average, affecting some 128 million American Homes. Unfortunately, much of that damage is likely to be uninsured. Here are some facts:
41 million people live in higher-risk flood zones – far more than the 13 million estimated by older FEMA models.
⦁ Flooding is possible anywhere it can rain.
⦁ The average cost to repair flood damage is $40,000.
⦁ Flood risk is not fixed. ⦁ Climate change, urban development, and ⦁ failing infrastructure are making floods more common around the country.
⦁ Flood insurance policies for those in moderate- and low-risk areas are generally affordable and can prevent serious economic damage in the event of a flood.
We are usually able to provide you with a Flood Quote in seven questions or less and are just a phone call away!
Gov. Mike DeWine, R-Ohio, has signed into law legislation that protects businesses and others from lawsuits arising from exposure to COVID-19, so long as they do not show intentional misconduct.
The legislation follows similar laws that have been enacted by Georgia, Idaho, Nevada and Tennessee, according to tracking by law firm Barnes & Thornburg LLP.
Ohio’s H.B. 606, which was signed into law by Gov. DeWine on Monday, provides civil immunity to businesses as well as schools, health care providers, business and other entities from lawsuits arising from the exposure, transmission or contraction of COVID-19, or any of the virus’ mutation, so long as these entities do not demonstrate reckless, intentional or willful misconduct, according to the legislation.
The legislation states Ohio’s General Assembly is aware that many business owners who are beginning to reopen their businesses are unsure about the tort liability they may face, while recommendations on how best to avoid COVID-19 infection change frequently and are “often not based on well-tested scientific information,” including pronouncements by the Centers for Disease Control and Prevention.
“The COVID-19 health emergency is new and novel” and the Ohio Supreme Court’s past opinions do not deal with the virus, or duties to protect the public from exposure in public places to airborne germs and viruses, it states.
The law is in effect retroactively from March 9 through Sept. 30, 2021
UPDATE (April 24, 2020): Many of our carriers are now providing relief to our client’s personal auto insurance premiums.
Discounts on personal auto insurance policies provided by the following carriers:
**New business policies written in the months of April or May will also receive a 25% payback that will be prorated for the time they are in effect during this period. Grange Insurance clarifies how and when you will receive your auto payback: How: You will receive your payback via check mailed to your billing address. When: Most checks will be distributed in May. New customers (with April or May starts) will receive checks in June.
The list may change as we believe all carriers will provide discounts to their policyholders based on fewer accident claims since the start of the stay at home rule.
At W.E. Davis Insurance Agency, we are very concerned about the issues surrounding the Coronavirus. Our clients’ and friends’ well-being is our most important concern. We hope you will take the advice of our elected officials and medical leaders who are directing the efforts to control the spread. Below is our interpretation of coverage under a business insurance program.
Commercial Insurance Policies and Loss of Income
Most commercial insurance programs have a Business Income coverage part. This is designed to provide protection in the event of a fire or other physical damage to an insured location and you lose income when customers cannot come in to buy your products or services. Generally, this coverage does not cover situations where your location is not physically damaged. i.e. – quarantines, people not coming for reasons beyond your control. This is a considered a “business risk” that all business owners retain. Economic downturns prompted by governmental actions cannot be foreseen by insurance companies so they can not properly price for that type of loss. Thus, it is excluded along with other types of losses like nuclear, war or military action.
Some attorneys are taking the approach that the virus itself causes property damage. If the courts agree there may still be problems trying to receive a claim check. The issue is how long will it take to fix the damage? Well, for most businesses, they would simply have to wash and disinfect the space. That generally would not take very long and most Business Income policies have a 72 hour waiting period before coverage begins. The property could be cleaned before the waiting period is up.
Where can I get Loss of Income coverage? The only type of coverage we are aware of that might provide business income loss due to a virus is in the special event and hospitality industries. Large events / venues and hotels can purchase insurance that covers many kinds of business income loss, including illnesses. However, even these policies may contain exclusions regarding loss of income due to the “fear” of something happening.
What if someone gets the virus and becomes ill? Health Insurance – The first thing one should do if they believe they’ve been exposed or become ill, is contact their personal physician. Of course, if it seems more serious, our hospitals are gearing up for an influx of patients so go to the ER if you believe your situation is more serious. In terms of insurance, your specific health insurance policy should cover expenses surrounding the virus. You may need to get prior approval for certain procedures, so be sure you make contact with your carrier. Testing should also be included if medically necessary. Again, check with your insurance carrier for specifics.
Workers Compensation– If an employee believes they became ill at work, Workers Compensation could respond. You should turn in a Workers Compensation claim to be sure, but the issue will be where the employee was exposed and if not at work, Workers Compensation would not apply.
General Liability – If a member of the public (like a client) gets ill from the virus and believes they were exposed at your business, they may try to sue you to collect for damages. If this happens, General Liability insurance might respond. However, these policies all contain a Pollution exclusion and the carrier may consider a virus/bacteria as a pollutant. Other policies might be even more specific and name “virus” as an exclusion.
Professional and Errors and Omissions Liability – If you are a professional (Doctor, Nurse, Accountant, Lawyer, Architect, Engineer or even Insurance Agent) you should have this type of coverage to protect your professional activities. Doctors and Nurses need Malpractice coverage for improper treatment or mistakes in care while the other types of professions need coverage for their advice and counsel. If a lawsuit alleges improper advice that led to a financial loss, coverage might respond. However, there are many exclusions and most exclude the release of Pollutants. (See General Liability above)
Directors and Officers Liability – D&O liability protects an organization from lawsuits that allege improper decisions made by the board that cause financial loss. However, most D&O policies exclude Bodily Injury so it is unlikely these policies would respond to suits alleging illness caused by a virus. The allegation is important so it is impossible to have a general statement regarding coverage for D&O claims.
We are happy to review your specific policy with you to go over the coverage you have. If you believe you have a covered claim, the only way to be sure whether your insurance provides or excludes coverage, is to turn in a loss. We are happy to help you through the process. In addition, we attach an article that provides more details about the specific types of coverage under commercial property insurance and how it might respond to a claim made regarding the Coronavirus.
We wish you the very best in these difficult times.
Disclaimer – The W.E. Davis Insurance Agency, Inc. is an Independent Insurance Agency serving their client’s insurance and risk management needs in Ohio and throughout the mid-west. This article is designed to provide basic information and is not providing legal advice. Please consult your insurance agent and/or attorney in determining whether or not to file an insurance claim.
Our agency, like most throughout the country are being asked essentially the same question, “Is there coverage in the business income policy for business closure or slow down as a result of the coronavirus?”
Unfortunately, the short simple answer is, no, there is no coverage. The longer answer is a bit more complicated, even though the ultimate answer is the same – no coverage.
In this short piece, three business income coverages are reviewed:
The business income coverage itself;
The additional coverage for civil authority; and
Dependent property coverage.
Business Income
We will begin with the insuring agreement from the business income coverage. The form reads:
We will pay for the actual loss of Business Income you sustain due to the necessary “suspension” of your “operations” during the “period of restoration”. The “suspension” must be caused by direct physical loss of or damage to property at premises which are described in the Declarations and for which a Business Income Limit Of Insurance is shown in the Declarations. The loss or damage must be caused by or result from a Covered Cause of Loss.
Within this insuring agreement, there are three key coverage triggers to consider, “suspension of…operations,” “direct physical loss or damage” and “covered cause of loss.” Let’s review each trigger.
Suspension of operations. Given the local, state or federal requirements, this condition may apply as the business may be shut down by a regulatory authority. As of this writing, California, Colorado, Connecticut, Illinois, Indiana, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont and Washington have all shut down restaurants and bars. The debate may be the necessity, but government made it necessary. So, regardless of the abuse of power and intrusion into our lives by the government, this requirement is met.
Direct physical loss or damage: Here is the first question that causes a bit of problem for whether coverage exists. Does or can a virus cause physical damage?
Physical or property damage as understood and applied in the courts requires physical harm generally evidenced by changes in the physical characteristics that require repair.
Consider an invisible virus on any property or even in the property, does the presence of a virus on a surface or in the air change the physical characteristics such that repair is required? Given the everyday application and meaning of those terms, no, the virus does not result in property damage.
So, there is no property damage as required by the form, and without property damage, business income coverage does not respond.
Covered Cause of Loss: Even if the presence of a virus can be “forced” by the courts to be considered property damage; is the mere presence of the virus a covered cause of loss? This is a longer discussion than the other two triggers discussed above; let’s detail this trigger.
Is a Virus a Covered Cause of Loss
Is the presence of the virus a covered cause of loss? Of course, whether it’s a covered cause of loss or not matters only if presence of the virus can cause property damage according to the courts.
There is a specific exclusion within the policy that may apply in addition to a mandatory exclusionary endorsement. Let’s look at both exclusions.
Within ISO’s business income policy written on a special cause of loss form, the following is excluded:
Discharge, dispersal, seepage, migration, release or escape of “pollutants” unless the discharge, dispersal, seepage, migration, release or escape is itself caused by any of the “specified causes of loss”.
A “pollutant” is defined in the form to mean: “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.” A contaminate, particularly a biological “contaminant,” is defined as a contamination of food or environment with microorganisms such as bacteria, VIRUSES, fungi or parasites.
Based on the policy wording and the applicable meaning of “contaminant,” the unendorsed policy excludes coverage for the presence of a virus via the pollution exclusion. But even this isn’t going to stop some attorneys from grasping at straws and any possibility of coverage. On March 16, the first business income suit was filed in Louisiana (Cajun Conti, LLC et al DBA Oceana Grill v. Certain Underwriters at Lloyd’s (and others including the governor and state)).
But even if the virus is considered property damage AND the pollution exclusion is ignored, how long will the “damage” be present?
Surface can be disinfected in one day.
If not taken care of and disinfected by the owner – according to recent scientific research, the virus can live for only a short time:
Up to four hours in the air depending on the consistency (mist vs. droplets); and
One to three days on surfaces – depending on the surface
Most Business Income policies have a 72-hour “deductible” or waiting period; so unless the waiting period has been reduced by endorsement (CP 15 56), there won’t be qualifying property damage after a maximum of three days for there to be a qualifying loss. But what about recontamination? Every new contamination is a new event and a new waiting period begins.
If the pollution exclusion is ignored, there is a mandatory endorsement attached to ISO property policies that removes all doubts, the CP 01 40. ISO Released the CP 01 40-Exclusion of Loss Due to Virus or Bacteria in 2006 as a mandatory endorsement to specifically exclude loss resulting from a Virus or bacteria.
ISO stated in the initial filing that the presence of viruses was NEVER intended to be covered due to the pollution exclusion, but they anticipated that some would torture the policy. The CP 01 40 was introduced to negate “efforts to expand coverage and to create sources of recovery for such losses, contrary to policy intent.” (ISO wording in the release.)
Business Income Result
So, what’s the result? There is no business income coverage.
There is no property damage – thus there is no coverage.
If courts disagree about property damage AND ignore the pollution exclusion, what is the period of damage? According to scientist, a maximum of three days without human intervention. (Remember, there is generally a 72-hour deductible.)
If CP 01 40 attached, there is no question that there is no coverage.
Ultimately and overall, there is no Business Income Coverage.
Civil Authority
Let’s go to the policy and look at the wording in regard to civil authority (slightly abridged):
Civil Authority
In this Additional Coverage, Civil Authority, the described premises are premises to which this Coverage Form applies, as shown in the Declarations.
When a Covered Cause of Loss causes damage to property other than property at the described premises, we will pay for the actual loss of Business Income you sustain…caused by action of civil authority that prohibits access to the described premises, provided that both of the following apply:
(1) Access to the area immediately surrounding the damaged property is prohibited by civil authority as a result of the damage, and the described premises are within that area but are not more than one mile from the damaged property; and
(2) The action of civil authority is taken in response to dangerous physical conditions resulting from the damage or continuation of the Covered Cause of Loss that caused the damage, or the action is taken to enable a civil authority to have unimpeded access to the damaged property.
Civil Authority Coverage for Business Income will begin 72 hours after the time of the first action of civil authority that prohibits access to the described premises and will apply for a period of up to four consecutive weeks from the date on which such coverage began and will end:
(1) Four consecutive weeks after the date of that action; or
(2) When your Civil Authority Coverage for Business Income ends;
whichever is later.
What are the requirements for there to be coverage? Some look very familiar:
There must be a covered “cause of loss.” The damage, if there is any, is excluded by either the pollution exclusion or the CP 01 40.
Access to the area must be prohibited by the civil authority. You can still get into the area you just can’t go into the building (maybe).
The property damage must have occurred within 1 mile of insured’s premises.
The civil authority must prohibit access due to dangerous physical conditions. Is it the property or the people that might lead to a civil authority decree? This is a biological condition not a physical condition.
There is a 72-Hour “deductible.”
What is the result of these requirements? There is likely no coverage.
Dependent Property Coverage
Before we look at the coverage, let’s first define what qualifies as a dependent property. Dependent properties eligible for coverage in the business income form include:
Buyers (ISO terminology – Recipient Locations);
Suppliers (ISO – Contributing Locations);
Providers (ISO – Manufacturing Locations); and
Drivers (ISO – Leader Locations).
Let’s review the language from one of the four endorsements:
We will pay for the actual loss of Business Income you sustain due to the necessary “suspension” of your “operations” during the “period of restoration”. The “suspension” must be caused by direct physical loss of or damage to “dependent property” at the premises described in the Schedule caused by or resulting from a Covered Cause of Loss.
Note the common requirements found in this language. There must be direct physical loss or damage and the damage must be from a covered cause of loss. Given the similarities, how does this coverage respond? Applying the same reasoning as that found in the other two sections, there is no coverage.
The Moral of the Story
In the business income policy, with or without the CP 01 40, there is no coverage – unless:
Courts ignore the meaning and reality of property damage;
Courts ignore the pollution exclusion (in the absence of the CP 01 40); or
Governmental authorities intervene.
Even if coverage is found – there is generally a 72-hour deductible. The virus doesn’t live in the air on surfaces beyond that amount of time.
Here is the final reality, is it the property or the people that is the problem? Is this a biological issue or a property damage issue? The commercial property policy is not designed to cover biological issues, it is for property issues.
To end this article, given the policy wording and requirements, there is no coverage for a business income loss resulting from the coronavirus.
However, if you want to make a claim, we will gladly do it and let the carrier make the final determination. Please call our office if you wish to take this approach.
Home improvement projects seem to have no season. While many big outdoor projects happen in spring and summer, homeowners may find the best time to work on a renovation project is when contractors are available or materials are less expensive. In fact, if your project is not weather-dependent, you might get a better deal at some other time of year.
No matter when you plan your next home project, our bloggers have tips that can ease your mind.
DO IT YOURSELF OR HIRE IT OUT?
One of the first questions you may consider is whether to do the work yourself or hire a contractor. The internet is full of videos showing step by step how to complete almost any task. If you have the skills, you might get just what you want by doing it yourself. But if you’re short on time, you might be willing to pay for the services of a professional craftsman. Some projects also bring significant safety risks. If you don’t know the territory, you’re probably safer hiring out the work. Our blogger goes into detail about what to look for in a contractor.
If you already decided to tackle a project yourself, there are some things you can do to make sure you get the best results. Preparation is key, but you also need to pay attention to items that could pose a safety hazard or cause unwanted damage. One of our bloggers is an accomplished DIYer and speaks from experience on things to do … and things to avoid.
One upgrade on many home improvement lists is the home security system. With all the Wi-Fi technology that’s available, many systems no longer require drilling holes and fishing wires through walls. Because of this, homeowners are attempting projects themselves. What should you consider when planning a home security system? There are pros and cons to all the available devices, and even whether you SHOULD do it yourself or hire a home security consultant. Our blog offers food for thought.
Most home DIY projects require some sort of tool. You can assume that most homeowners have basic hand tools, but falling costs mean electric, gas-powered and air-powered tools are no longer out of reach of most homeowners. And for highly specialized tasks, you can affordably rent the specialized tools to get the job done. Whether you own or rent, make sure you use power tools safely.
And remember that home improvement projects do just that: Improve your home. After all your diligent work – whether you do it yourself or hire a professional – be aware that the improvement can increase the value of your home. In case of a loss, you don’t want to be caught underinsured. Whenever you plan a renovation, touch base with your insurance agent to make sure your policy keeps up.
Tax return identity theft has reached such epidemic proportions that it tops the list of the IRS’s Dirty Dozen Tax Scams. Here are tips the IRS wants you to know about identity theft so you can avoid becoming the victim.
Phishing: Taxpayers should be alert to potential fake emails or websites looking to steal personal information. The IRS will never initiate contact with taxpayers via email about a bill or tax refund. Don’t click on one claiming to be from the IRS. Be wary of emails and websites that may be nothing more than scams to steal personal information. (IR-2018-39)
Phone Scams: Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as con artists threaten taxpayers with police arrest, deportation and license revocation, among other things. (IR-2018-40)
Identity Theft: Taxpayers should be alert to tactics aimed at stealing their identities, not just during the tax filing season, but all year long. The IRS, working in the Security Summit partnership with the states and the tax industry, has made major improvements in detecting tax return related identity theft during the last two years. But the agency reminds taxpayers that they can help in preventing this crime. The IRS continues to aggressively pursue criminals that file fraudulent tax returns using someone else’s Social Security number. (IR-2018-42)
Return Preparer Fraud: Be on the lookout for unscrupulous return preparers. The vast majority of tax professionals provide honest, high-quality service. There are some dishonest preparers who operate each filing season to scam clients, perpetuating refund fraud, identity theft and other scams that hurt taxpayers. (IR-2018-45)
Fake Charities: Groups masquerading as charitable organizations solicit donations from unsuspecting contributors. Be wary of charities with names similar to familiar or nationally-known organizations. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate charities. IRS.gov has the tools taxpayers need to check out the status of charitable organizations. (IR-2018-47)
Identity theft is scary and expensive for both individuals and businesses, but there are ways to protect yourself. Refer to the Taxpayer Guide to Identity Theft or the IRS Identity Theft Protection page on the IRS website, and then ask your independent insurance agent for more information about data compromise and identity theft coverage.
This loss control information is advisory only. The author assumes no responsibility for management or control of loss control activities. Not all exposures are identified in this article. Neither The Cincinnati Insurance Company nor its affiliates or representatives offer tax or legal advice. Consult with your tax adviser or attorney about your specific situation. Contact your local, independent insurance agent for coverage advice and policy service.
