COVID-19: impact on insurance policies

There is tremendous anxiety among businesses and consumers as a result of COVID-19. Naturally, people and business are turning to their insurance policies to see whether or not they have cover for the disruption caused.

The comments below are general in nature and it is important to review your specific policy’s terms and conditions, including exclusions.

Business Interruption Insurance

Claims for business interruption insurance are usually tied to some form of physical loss in order to attract cover. This crisis is different in that there is no specific physical damage and so the policy may not operate. Even if it did operate, the policy may contain an exclusion for a contagious disease.

Event Cover/Cancellation Cover

Policies covering event cancellations such as concerts and exhibitions are likely to include exclusion for contagious diseases – although we are aware of exceptions to this.

If the pandemic is not excluded, look to Government directives on mass gatherings for guidance as to whether or not you can make a claim. This is because a policy is unlikely to cover an event that is voluntarily cancelled by organisers.

Travel Insurance

Check if there is a contagious diseases exclusion (or something similar). If not, consider if the booking:

• relates to a destination with a ‘do not travel’ designation by the Government. If not, may not be covered; and
• was made before or after COVID-19 was declared as a ‘known event’ by the insurer. If after, unlikely to be covered.

Public Liability

Businesses that remain open during this crisis may be exposed to the risk of being found liable in situations where someone has picked up the illness at their venue. If symptoms are mild, it is unlikely there will be a significant claim; however, there are scenarios where the claim could become serious, such as death, physical injury or mental distress.