COVID-19 FAQ: Business Operations

Unfortunately, this is the case for many businesses. The government has announced a number of measures to help you get through this difficult time. There are also steps you can take to determine your business’ future:

• Review your finances: Look at your revenue vs your expenses – are you able to meet your basic expenses? Speak to your accountant/bookkeeper about your options and whether it makes sense to stay open, pause your business, shut down until an opportunity in the market arises, or close your business.
• Make a Business Continuity Plan: Weathering the storm will be difficult, so make sure you have a plan as to how to do it. Restarting a business that has been suspended will take thought and time to bring back to its former level. Are there other options for your business to stay open? Can you find new suppliers? Can you change your business model to continue to serve your clients (e.g. provide delivery of food instead of having dine-in customers).
• Speak to your commercial insurance provider: We have been hearing from you and insurance companies that COVID-19 is very rarely covered. Some insurance companies require that you have physical damage in order to access your Business Interruption insurance, while others just do not cover diseases. Because every commercial insurance policy is different, we recommend that you speak with your insurance provider to better understand what coverage is available to you under the terms of your policy. If anything, you should check if any flexibility exists with your insurer and figure out what you may need to know to keep your commercial and personal insurance policies valid for when you are ready to open your business doors again. For more information visit the Insurance Bureau of Canada.
  • The Insurance Bureau of Canada (IBC) is implementing a series of consumer relief measures to ease the financial burden on insurance customers. These include immediate auto premium reductions and waiving NSF fees charged by insurers for insufficient funds to cover a customer’s premium. IBC members will also work with small businesses to help manage costs, exploring flexible payment options for those in a vulnerable position or facing financial hardship as a result of COVID-19.
  • For more information about business interruption coverage, read IBC’s FAQ. You should review it before calling your insurance provider.
• Communicate with your employees twice a week:
  • Let employees know what safety measures/policies you are putting in place to keep them safe.
  • Post educational posters and share safety tips.
  • Ensure that there is a way for employees to notify you if they are sick, whether that be through the health and safety representative/committee or though their manager.
  • Talk to employees about their job security/health status/vacation/benefits options.
• Look at your business function and re-evaluate frequently:. Cutting back on non-essential projects could save you money; looking at how your business can pivot and adapt to this COVID-19 environment will help your business’ future planning.
• CFIB has negotiated CFIB Savings deals for you and your business. They are included in your membership, so we encourage you to take advantage of them.

• Look at your contract or lease to see if there is a clause regarding extreme circumstances.
• If there is nothing in the contract, you can try and negotiate an agreement to reduce or delay your payment.
• Document any negotiations, discussions, agreements and/or payments.
• Look carefully at your finances, so you know exactly what you can afford before you speak with your landlord/a supplier. If they permit you to reduce payments, you want to be sure it is an amount you can comfortably afford.
• Speak with your bank, credit union, BDC, EDC or other loan provider for some relief.
• Speak with your insurance provider to better understand what coverage is available to you under the terms of your policy. Check if any flexibility exists with your insurer and figure out what you may need to know in order to keep your commercial and home policies valid for when you are ready to open your business doors again. For more information visit the Insurance Bureau of Canada.
• Review the financial support programs offered by the government to see if any can help.

CFIB continues to work with its trusted partner, PrimaSure to provide low-cost group benefits for business owners and their employees.

To alleviate some of your stress during the crisis, PrimaSure, offered by Nexim Insurance Solutions, has opened its call lines to all business owners with group insurance questions - not just PrimaSure clients.

The below answers mainly pertain to PrimaSure products. For more information on how your particular contract is affected, contact Nexim by phone at 1 866 693-2342 or email at info@nexim.ca.

How will a temporary layoff impact my employees’ insurance coverage?

During a layoff, all benefits are maintained, including disability insurance (if this is a benefit on your plan) for up to 3 or 4 months (depending on your contract), as long as premiums continue to be paid.

Employers have different options to be applied to the entire class of employees which are:

• Maintain all benefits for their employees during layoff.
• Maintain all benefits without disability insurance.
• Terminate all benefits or suspend the group plan.
  • In Quebec, members whose health coverage has been terminated, must register with the RAMQ in order to have coverage for their medications. Once they have returned to work and are actively back on the group insurance plan they will have to contact the RAMQ to advise they again have access to private medical.

Please call Nexim Canada before making a decision on one of the above options to be properly informed on the forms that must be completed and information that must be submitted to the carrier.

What are the risks associated with not maintaining my insurance coverage during layoff?

While in the short term it may seem better to terminate the benefits for employees while on layoff, it is important to consider the following points that could affect the decision:

• Should an unfortunate death occur during the layoff, there would have not been active life insurance in place for the participants and their dependents;
• Once a participant has decided to terminate disability benefits during a layoff:
  • Should the participant fall ill and be unable to return to work once the layoff has ended, they will not be eligible to make a disability claim if the disability occurred during the time they were not covered; and
  • Once returned to work, the pre-existing clauses may once again be applied for the disability benefit.
• All participants who are currently out of the country will be left without coverage for any emergencies that occur;
• All employees who decide to terminate their benefits by their own will risk having to provide proof of good health to re-enrol on the plan once returned to work; and 
• If the re-enrolment period for the group is missed, participants may need to provide proof of good health to re-enrol on the plan.

Can I suspend my company’s Group Insurance Plan?

Yes, a group can decide to suspend coverage for all employees (during that period any claims incurred will not be reimbursed including life insurance) for a period of up to 3 or 4 months depending on their contract. During this period the group would not pay for any premiums. 

In order to avoid a re-enrollment process, the group would need to reinstate the benefits prior to the maximum layoff period indicated in their contract.

Some of my full-time employees are having their hours reduced to an amount less than the eligibility requirement on our insurance contract, can they still be covered?

The employees no longer fulfilling the minimum amount of hours to be eligible for the plan will be able to remain active on the plan for the length of the layoff period indicated for their plan, after which they will need to fulfill the minimum hours required to stay active on the plan.

Can I postpone the group insurance renewal?

This will depend on your provider and plan – please contact Nexim for more information on your specific plan.

How can people needing medication avoid going in person?

There are postal pharmacies at your disposal that will deliver medication to your door. Pharmacies in your area may also be delivering prescriptions to avoid an overload of people in their establishments. Maintenance drugs can easily be delivered on schedule to your door and can be processed by phone or online.

Can I temporarily layoff my staff but keep their own health insurance benefits active?

Group Insurance carriers are asking for classes within the policies to be dealt with the same way. A decision must be made for the entire class of people. In the situation that only partial staff is laid off, those employees or owners who are still actively working can continue to have access to the Group Insurance Plan as usual.

As businesses close and there is a move to working at home, cyber-security is more important than ever. There have already been reports of malicious emails masquerading as legitimate entities using the COVID-19 pandemic in an effort to capture private and personal information.

NOTE: Government will not reach out to you directly by phone or email to offer you relief.

Many small businesses are now working remotely for the first time, and if you’re one of them you may be confronted by a host of new cyber risks. CFIB partner Northbridge Insurance can help you protect your business and your employees with free tip sheets and guidelines. Check out the following links to learn: 

• Cyber Risk Prevention Tips
• Remote employee risks and how to stay protected
• Best practices for web cams and video conferences
• If a VPN is right for you
• How to avoid phishing scams

You can also learn more about protecting your business from scams using these government resources:

• Canadian Anti-Fraud Centre
• Competition Bureau – Little Black Book of Scams

• Canadian Anti-Fraud Centre
• Competition Bureau – Little Black Book of Scams
  
  

If you struggle to pay bills, find that you are evading collection calls, and feel you can no longer make ends meet, it may be time to explore your options.

Alternatives may be:

• Credit counselling
• Debt consolidation
• Consumer or business proposal
• Declaring bankruptcy

Talk with your financial institution about the first two options. To learn more about a proposal, or filing bankruptcy, meet with a Licensed Insolvency Trustee (LIT). LITs are federally regulated professionals who can evaluate your financial situation, explain debt-relief options, and help you make informed choices. Find a Licensed Insolvency Trustee.

To learn more about bankruptcy and insolvency, check out this inforgraphic and this series of short videos, provided by the Office of the Superintendent of Bankruptcy Canada.

What is a Consumer or Business proposal?

A proposal is an alternative to bankruptcy. A Licensed Insolvency Trustee (LIT) prepares your offer to pay creditors a percentage of what is owed over a specific period of time, or to extend the amount of time to pay off the debt, or a combination of both. The creditors vote to accept or reject the proposal. Accepting a proposal means creditors can recover at least some of the outstanding debt, compared to bankruptcy where they may lose everything you owe them.

There are two types:

1. Consumer proposals: For individuals owing less than $250,000, excluding mortgages; and
2. Division 1 proposals (Commercial proposals): For businesses and individuals (there is no limit regarding how much money is owed).

Once all the terms of the proposal are met, the debtor is legally released from the debts included in the proposal.

A proposal is noted on your credit report. If you have a good payment pattern, you will be that much further ahead when you want to rebuild your credit.

What are the different types of bankruptcy?

Bankruptcy is a structured, formalized legal process to be released from the obligation to repay debts. It can allow you to reset your finances, but bankruptcy has limitations and longer-term implications. Therefore, it is often viewed as the last resort after the alternatives of refinancing or filing a proposal.

There are three types:

1. Personal: Canada’s most common type of bankruptcy. It often occurs when someone has a loss of income, can’t decrease debt, has maxed out borrowing options and relies on credit for everyday expenses.
2. Small business: For sole proprietors and partnerships that are not incorporated, a small business bankruptcy is treated the same as a personal bankruptcy. The assets and debts of the business are viewed as the owner’s personal assets and debts. Your personal assets (eg., house or vehicle) can be seized if your business cannot meet its financial obligations.
3. Corporate: For incorporated businesses, which are legal entities, and therefore owners’ personal assets are not at risk.

Once you have declared bankruptcy, creditors cannot take your assets or inventory, nor can they garnish your wages if you get a job. Your Licensed Insolvency Trustee (LIT) will sell your assets, including any acquired during your bankruptcy, but excluding any assets exempted by provincial and federal laws. Money raised by the asset sale is held in trust by the LIT for distribution to your creditors.

Bankruptcy will be noted on your credit report, making it harder to get a loan. You may have to complete certain duties, such as attending credit counselling sessions and reporting your income to your trustee every month.

Visit Bankruptcy – Business structures to learn how a bankruptcy will affect the CRA accounts for sole proprietorships, partnerships and corporations.