Dear Valued Client,
Insurance is a contract between two parties, whereby the Insurer provides indemnity / compensation for stipulated events that happen by chance or are fortuitous by nature.
The Coronavirus disease (COVID-19) outbreak was declared a Public Health Emergency of International concern on 30 January 2020 by the World Health Organization, and thus can no longer be seen as a fortuitous event going forward for clients that now start asking for this cover.
Defined Events as per the attached Monitor Commercial Policy Wording:
Loss following interruption of or interference with the business in consequence of damage occurring during the period of insurance at the premises in respect of which payment has been made or liability admitted under:
(i) the fire section of this policy
(ii) the buildings combined section of this policy
(iii) the office contents section of this policy
(iv) any other material damage insurance covering the interest of the insured
but only in respect of perils insured under the fire section hereof (hereinafter termed Damage).
Liability shall be deemed to have been admitted if such payment is precluded solely because the insured is required to bear the first portion of the loss.
Business Interruption on a Commercial or Building Insurance Policy does not cover losses caused due to the COVID19 virus.
While the coronavirus continues to wreak havoc on larger businesses, stock markets and economies around the world, individual businesses of various sizes are not only vulnerable to work stoppages but might not have adequate cover from the outbreak’s impact on their Business. The Insurance Companies are unable to offer cover to remedy these situations.
Policy Exclusions:
Infectious Epidemic Exclusion (Applicable to Fire, Buildings Combined, Office Contents, Goods in Transit, Business All Risks, Accidental Damage, Motor, Motor Traders, Electronic Equipment and any other property classes)
This insurance excludes any loss, damage, cost or expense, directly or indirectly arising out of, contributed to by, or resulting from any infectious epidemic/pandemic. For the purpose of this clause Infectious Epidemics shall mean the sudden, unexpected, large-scale manifestation of an initially locally contained, infectious disease relating to people which spreads very rapidly and with great virulence. If the company alleges that by reason of this exclusion, any loss, damage, cost or expense is not covered by this policy the burden of proving the contrary shall be upon the insured.
Infectious Epidemics/Pandemics Exclusion (Applicable to Money, Glass, Fidelity, Public Liability, Employer’s Liability, Stated Benefits, Group Personal Accident and any other casualty classes)
This insurance excludes any loss, damage, cost or expense, directly or indirectly arising out of, contributed to by, or resulting from any infectious epidemic/pandemic (if classified either way by the appropriate national or international body/agency) which leads to:
a) the imposition of quarantine or restriction in movement of people or animals by any national or international body or agency;
and/or
b) any travel advisory or warning being issued by a national or international body or agency and in respect of a) or b) any fear or threat thereof (whether actual or perceived).
If the company alleges that by reason of this exclusion, any loss, dame, cost or expense is not covered by this policy the burden of proving the contrary shall be upon the insured.
Coronavirus Exclusions:
Notwithstanding any cover or extension under this section indicating anything to the contrary, this section does not provide cover for any loss following interruption or interference with the business directly or indirectly
caused by, or contributed to by, or in consequence of:
a. Coronavirus disease (COVID-19);
b. Severe acute respiratory syndrome Coronavirus 2 (SARS-CoV-2);
c. Any mutation or variation of a) or b) above;
d. Any fear or threat of a), b) or c) above.
Some Scenarios to consider:
Scenario 5. The Insured, submits a claim for an insured person with COVID-19, insured under a Group Personal Accident section or Stated Benefits section, for bodily injury by either Death; Permanent disability; Temporary total disability; Medical Expense. Is this covered?
· This is not covered as the Defined Events of both these sections require bodily injury to be caused by accidental, violent, external and visible means. The claim does not fall within the Defined Events of the section’s wording.
Scenario 6. A business is dependent on receiving components from China. Due to COVID-19, this supply does not happen and the business is unable to operate for a period of time until the normal supply chain is restored. The company in China is listed as a Specified Supplier, under the Suppliers’ extension of the Insured’s commercial policy. Is this covered?
· This is not covered.
If the Specified Suppliers extension is included in the Policy cover then the cover for the loss of supply will only be entertained if the loss of supply was caused by a peril of the Fire section.
o The Specified Customers extension, if included, also requires the loss to be caused by a peril of the Fire section.
Scenario 7. A business located between two cities in South Africa, and the only access to their premises is by means of the national road. Quarantine regulations are imposed to restrict access by regulation pertaining to public health and safety by regional government ten kilometres from the insured premises. The insured does not have the Murder / Suicide / Illness / Disease / Pollution / Shark and Animal Attack Extension, however, they do have the Prevention of access extension. Is this covered?
· This is not covered. Whilst when the insured is prevented or hindered from using the premises, this is only if the loss was caused by a peril of the Fire section