global business impact: first observations
We’re seeing more and more clients impacted by the coronavirus measures.
This raises the question: does my business have any coverage?
Although claims may be prepared worldwide , there are also major obstacles to getting these ' losses ' compensated. Many of the coronavirus coverage theories are untested in the courts, and we’re already seeing signs that the major insurers will actively challenge those coverage theories that they believe “push the envelope” of the insurance contract.
It is certainly not a bad idea to document any losses in order to file a claim later on (with insurers but also with the government). Fairness commands us to temper these expectations.
The question is therefore whether you should incur potential costs of documenting any losses.
impact on insurances : an overview
Dependent (or Direct) Business Interruption losses due to factory shutdowns ( as in China, for example)
A long shot on coverage, since there’s no direct material loss or physical damage to trigger the BI coverage. There’s only a government order to prevent the spread of the contagion.
The policies generally require that the act of civil authority stem from a direct physical loss or damage caused by a covered peril, within a fairly narrow geographic proximity to the covered location.
Potential contamination of stock (work in process or finished product)
Regarding perishables, we generally have solid coverage arguments .
The suspected contamination of stock from the coronavirus would be the same as any other biological agent, though we are expecting to see new policy language tightening.
For non-perishables it’s a difficult one. It’s been reported that the maximum duration the coronavirus can survive on a non-perishable surface is 9 days, so beyond that period the goods ultimately would have no inherent loss of value or damage stemming from coronavirus exposure.
Liability
In terms of liability, we’re not seeing much yet. The main topic in this area concerns contractual liability. If a supply contract contains penalties for missing guaranteed delivery dates, those are generally not going to be covered. Normally contracts would contain clauses like « hardship », « imprevision » or « force majeure » to handle this issue.
But for other potential liabilities, both General Liability and Directors and Officers (D&O) policies may provide coverage opportunities.
Telework and Accidents at work
A teleworker is covered by occupational accident insurance if the accident occurs during and by the performance of the employment contract. He must therefore be under the authority of his employer and his employment contract at the time of the accident. A written document (in any form) is required that allows the employee to do telework; this must also indicate the place where the telework is performed (if no place is stated, the presumption of work accident applies to the place of residence or the place (s) where the telework is usually performed), as well as the timetable of the telework (if this is not stated, the presumption of an accident during working hours that the teleworker would have to perform if he was employed on the premises of the employer applies).
The cover applies even without a written document, but in this case the teleworker must demonstrate that the accident occurred during and due to the performance of his employment contract. The teleworker is also covered on the way from his place of residence to the school or shelter of his children and vice versa, as well as from his place of residence to the place where he takes his meal or purchases it and vice versa (the same rules as for the employee in the company). Please note that an accident at work must occur in the context of the employment contract. An employee who climbs on his roof is therefore not covered.
Cancellation insurance
Cancellation claims for a trip due to the coronavirus, which has spread in the area you wish to travel to, are not covered by the standard cancellation insurance. Some insurers do offer more extensive policies that allow cancellation to be covered, sometimes depending on negative travel advice from the FPS Foreign Affairs for the area concerned. If you have already been affected by the coronavirus prior to your departure, you will fall under the standard coverage of the cancellation insurance as for other illnesses. Please note that cancellations due to the coronavirus are no longer covered taken out since the negative travel advice from the Ministry of Foreign Affairs / the outbreak of the epidemic worldwide.
Assistance
Most travel assistance insurers cover medical expenses, such as hospitalization or doctor visits, due to a coronavirus infection that you incurred while traveling. You are covered as for any other illness or accident. This usually happens up to a certain maximum amount stated in the policy. The costs for an extended stay abroad are included in the standard coverage with some social security insurers, with others only in more extensive policies, usually up to a certain maximum amount. Repatriation costs are covered by most travel assistance insurers in the standard product, with some others only in the more extensive policies. Cancellation requests for a trip due to the coronavirus that has spread in the area you wish to travel to are not covered by the standard cancellation insurance. Some insurers do offer comprehensive policies on the coverage of the cancellation is still possible, or not depending on a travel warning for failure FPS Foreign Affairs for the area. If you have already been affected by the coronavirus prior to your departure, you will fall under the standard coverage of the cancellation insurance as for other illnesses. Please note that you will always have to take into account the sanitary rules imposed by the government, whereby assistance can only be provided if access to the relevant area is not closed or restricted by the local authorities.
Hospitalization insurance
If you are hospitalized as a result of a corona infection, your hospitalization insurance will cover you. Admission to a Belgian hospital is always covered. In the case of hospitalization abroad, coverage depends on the general terms and conditions. Some insurance policies only cover hospitalizations in Belgium, others also cover hospitalizations in Europe or even worldwide. If your insurance provides cover abroad, and you travel to a risk area despite a negative travel advice from the Ministry of Foreign Affairs, the insurer will intervene in accordance with thegeneral terms and conditions in the event of hospitalization as a result of a corona infection.
Life insurance
If your life insurance policy includes death cover (which is often the case in traditional life insurances, funeral insurances, group insurances, etc.), coverage is effective if you die as a result of the corona virus. Death as a result of an epidemic or pandemic is not excluded from coverage. Those who, despite a negative travel advice from Foreign Affairs, travel to a risk area (such as Northern Italy) and become infected and die on the spot, are normally covered.
Construction All Risk insurance
The corona epidemic is also having an impact on the construction industry. If construction sites may be shut down for a longer period of time, certain insurance companies are already prepared to renew existing policies free of charge, albeit under certain conditions. If necessary, construction sites will remain insured during the 'shutdown of works' as a result (directly or indirectly) of the corona virus. It goes without saying that the insured therefore leaves the construction site with extra security measures (fencing, extra supports for structures under construction, etc.).
Guaranteed income/disability insurance
If you are incapacitated for work as a result of a corona infection, you will be covered in your guaranteed income insurance in accordance with the provided coverage conditions. Incapacity for work as a result of an epidemic or pandemic is not excluded. Those who are quarantined preventively without being ill cannot rely on their guaranteed income insurance. Only incapacity for work as a result of an illness or accident is insured.
Events
Event organizers who have cancellation insurance can invoke this insofar as the contract covers the situation that arises. Usually such a policy covers the losses that the insured / organizer suffers when an event is canceled due to a cause that occurs independently of the will of the insured / organizer (for example, a ban on meetings). Relevant losses eligible for compensation and relevant limits within are specified in the general and special conditions of the insurance contract.
Expansion of cover
Companies and governments are currently looking at concrete options and possible measures regarding the possible extension of cover and changes to your policies. Of course, we follow this very closely, but given the constant evolution we cannot provide further details hereon. For additional practical information on this subject or regarding further insurance needs, you can always contact us through your trusted contact person or through insurance@mawyc.be.
In the extensive history of Mawyc Insurance, we have already been confronted with many challenges and it always has made us stronger. We would like to take this opportunity to thank you for your loyalty, as well as to confirm once again that the Mawyc Insurance team continues to offer you our entire support and service. We are familiar with being available at all times and this will not be affected by these unforeseen challenges around us. We remain available, both by telephone, as by our usual e-mail addresses.
Stay healthy, take care of yourself and your loved ones!
This content was updated to March 21, 2020 and is subject to any subsequent modifications.. This is an informative note, in which guidelines are only an indication and can always differ per company.
disclaimer & copyright
Copyright © 2020. All rights reserved.
The material contained in this publication is designed to provide general information only.
Whilst every effort has been made to ensure that the information provided is accurate, this information is provided without any representation or warranty of any kind about its accuracy.
Mawyc Insurance cannot be held responsible for any mistakes.
