The Reschini Blog: Preparing for Covid Claims
Covid-19 has placed a spotlight on insurers, who have been preparing for the waves of inquiries and claims across multiple categories of coverage.
Many insurers, following the 2003 SARS outbreak, introduced exclusion clauses for communicable diseases and epidemics/pandemics into most non-life products such as business interruption and travel insurance.
Because business interruption policies usually pay out only if physical damage occurs to an organization's assets or operations, coronavirus-related claims may not be covered. Claims and related litigation have already begun and the marketplace is reacting.Travel insurance may offer cover if a customer is diagnosed with the virus before or during a trip, but not for travel cancelled because of the pandemic. The lone exception would be if the policyholder has taken out premium “any cause” cover, but very few do. The pandemic may actually spur increased interest in such premium policies.Two major areas to watch are trade credit insurance and workers compensation.Trade credit insurance covers businesses against debts that can’t be paid by customers or suppliers. Small-to-medium sized businesses could be hit hard due to supply chain disruption and a crunch in business levels. The cost may hinge on the extent of the pandemic and government restrictions on non-essential businesses. Claim activity in this sector could spiral quickly.Regarding workers' compensation, claims could rise from employees asserting they were not adequately protected by their employers against exposure to the virus brought about by their normal working duties. Insurers offering this type of coverage to employers should prepare for this level of increased activity.The professionals at The Reschini Group can guide you in determining how best to safeguard your organization against exposure in the wake of Covid-19.Source: https://home.kpmg/xx/en/home/insights/2020/03/do-insurers-have-covid-19-covered.html
Copyright 2021 The Reschini GroupThe Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.