Coronavirus and insurance

BE Law
The coronavirus will impact almost all aspects of the insurance sector and will trigger many insurance policies. It is important to analyse your insurance policy terms and conditions and to determine whether and to what extent you are covered.

The coronavirus will impact almost all aspects of the insurance sector and will trigger many insurance policies. Our lawyers at Stibbe can assist you by carefully analysing your insurance policy terms and conditions and determining whether and to what extent you are covered. We can also assist you in communicating with your insurer and filing formal claims. If necessary, we can also assist you in your court proceedings.

What impact will the coronavirus have on the insurance sector?

Any pandemic (such as the coronavirus) is, by virtue of its tremendously large scale, apt to affect a multitude of insurance lines (life & pension insurances, health care and hospitalisation, but also some types of property insurance) and thereby have a serious impact on the insurance sector. From a technical standpoint, assessing the frequency and (certainly) the impact of pandemics is a tall task for insurers and reinsurers, as trustworthy actuarial data are lacking to a large extent. However, it is certain that the coronavirus pandemic will raise unseen legal questions about insurance coverage and that coronavirus-related litigation will emerge.

How to determine whether there is any insurance coverage?

The coronavirus is impacting businesses in various ways. In order to identify any available insurance coverage, it is important to:

  1. Determine the impact of the coronavirus on your particular business or activities. You should first of all define the loss you are suffering as a result of the coronavirus (e.g. incurring of medical or repatriation costs, cancellation or interruption of business, default of certain business partners, etc.).
  2. Review insurance policy terms and conditions. Secondly, you should check whether the loss is covered under any insurance policies taken out by you or taken out in your favour.
  3. Notify the insurer. If said loss could fall under the coverage, then you should notify it and file a claim with the insurer without delay.

What types of insurance policies could the coronavirus trigger?

There are several types of insurance policies that could be triggered, a.o.:

Life and pension insurance 

Standard life insurance, which covers death, will also cover the insured in the event of death caused by a disease, such as the coronavirus. In principle, death as a result of an epidemic or pandemic is not excluded from coverage. 

Pension insurance schemes usually provide for surviving dependant's pensions and partner pensions.

Hospitalisation insurance

Hospitalisation insurances provide cover in the event that the insured is hospitalised in Belgium. If one is hospitalised abroad, cover depends on the general terms and conditions of the insurance contract.

Disability (or incapacity) insurance

Regarding disability (or incapacity) insurances, the incapacity resulting from being infected by the coronavirus should be covered. By contrast, anyone who is placed in quarantine as a (voluntary) precautionary measure, without being ill, does not seem to benefit from disability (or incapacity) insurance coverage.

Travel insurance (cancellation and assistance) 

Standard travel cancellation insurance does not cover pandemics per se: cancelling a trip because the coronavirus outbreak has spread to the country you had planned to visit, is thus not covered. It will only cover the cancellation if the insured is infected with the coronavirus prior to departure, just as coverage would be granted to such person for any other medical reasons. However, some insurers offer more extensive types of coverage, e.g; cancellation of travel due to official announcement from the authorities warning or discouraging travel to the purported destination (in that respect it is noteworthy that on March 14th the Federal Government published a general negative advice for any travel abroad). 

Most travel assistance insurance policies will cover medical and ancillary expenses that have been incurred because of a coronavirus infection, just as they cover the same expenses incurred because of other diseases. 

Nevertheless, most travel insurances exclude losses resulting from events that were known or foreseeable.

Business interruption insurance 

Business interruption insurance covers the actual loss of income that a business sustains due to the necessary suspension of its operations. It may be covered as part of a company's commercial property insurance or via a separate policy. It is usually triggered when the suspension is caused by "direct physical loss, damage or destruction to property".

It can be questioned whether said physical loss- requirement will be fulfilled in the event of a business interruption caused by the coronavirus. However, it must be noted that business interruption policies often provide for an “interruption by civil or military authority"-extension (covering business interruptions due to the mere fact that the government restricts the access to the insured's premises). Such extension may more easily lead to the risk being covered (in that respect it is noteworthy that on 12 March the Federal Government ordered the temporary closure of discotheques, cafes and restaurants and cancelled any recreational activities until 3 April 2020).

Besides the aforementioned types of insurances, there are also other insurances that will be triggered by damage caused by the coronavirus, for example: event insurances, which should generally cover losses suffered by the event organiser (the insured) if the event is cancelled for reasons beyond its control (e.g., force majeure, which can include a ban on events and gatherings). This pandemic can also give rise to liability claims, which would trigger liability insurance disputes and related matters.

More about the coronavirus

You can read more publications on the impact of the coronavirus on our website. Here you will also find a list of contacts within our office who can advise you with questions about the implications of the coronavirus for your company.

This article provides some general insights on different legal questions. These insights do not constitute legal advice and may not be relied upon as if they were legal advice. The outcome of any legal analysis will strongly depend both on the specific facts and circumstances of each case and on the particularities of the sector and legal relationship involved. Our legal experts in the various domains concerned are available to assist you with the analysis of your questions and provide specific advice tailored to your case and circumstances.