The Coronavirus outbreak in China, as well as the spread of the virus within Europe, has already had an impact on various industries. As the first occurrences of infection with the Coronavirus have been experienced in the Netherlands, we have seen an increase in the number of questions from our associates about cover. We would like to take this opportunity to respond to your questions.
Fire and/or business interruption insurance
An outbreak of a virus is not considered to be material damage. The business interruption and/or other effects that your company may experience as a result of this outbreak is therefore, in almost all cases, not an insured event under your fire and/or business interruption insurance. In some exceptional cases, for example for specific segments, such as the healthcare sector, there is the possibility of there being a pre-negotiated sublimit. If this is the case, your Account Manager will proactively inform you of this as soon as your organisation or institution announces (or if this is revealed by the media) that it has taken radical measures – such as a lockdown – as a result of the spread of the Coronavirus.
Also, additional costs cover – which is possibly included in your fire and/or business interruption insurance – requires there to be material damage in order to be considered an event that is covered by the policy. That also means, for example, that additional costs that are incurred in relation to ICT (in order to be able to ensure that any staff who have been quarantined can continue working) in relation to the consequences of the spread of the Coronavirus, are not eligible for compensation.
In terms of transport insurance, fundamentally the same applies as fire insurance, i.e. that there has to be material damage in order for there to be a covered event under the policy. In the majority of cases, this is not the case, except in exceptional cases.
This could be the case if goods were already on their way to a destination, but because of the Coronavirus, the insured journey is interrupted, disrupted, or terminated beyond the control of the insured owner of the goods.
Every policy is different, and there are generally also exceptions in the world of transport insurance. Should you have any questions about the cover, we therefore advise you to contact your Account Manager.
Computer insurance also requires that there is material damage and therefore offers no cover.
Sickness absence insurance
Sickness absence insurance will provide cover if an employee is unable to carry out his/her work as a result of infection with the Coronavirus (and is sick as a result of that). However, if an employee is unable to carry out his/her work because he/she is in quarantine, the sickness absence insurance will not provide cover.
A pension provider can work with different risk insurers for the insurance of the survivor’s pensions, these risk insurers have different conditions. In the overview below you see the applicable conditions for different scenarios based on the situation as known on March 19, 2020.
|A participant catches the corona virus in the Netherlands and dies as a result.||Partner’s and orphan’s pension and ANW-gap pension are paid to the surviving relatives.|
|A participant has traveled to an area designated by the Ministry of Foreign Affairs as a risk area and dies as a result.||Partner’s and orphan’s pension and ANW-gap pension are paid to the surviving relatives.|
|A participant traveled to an area before this was designated as a risk area by the Ministry of Foreign Affairs. The area has now become a risk area with an orange or red color code.||Partner’s and orphan’s pension and ANW-gap pension are paid to the surviving relatives.|
Travel insurance and cancellation insurance
If trips are planned to destinations where the Coronavirus has been found, in principle a claim cannot be made under the cancellation insurance. There are so-called “All Risk” cancellation insurances that may provide cover, but that depends on the wording of the specific policy.
If someone nevertheless travels to a destination where Code Orange or Code Red applies, that can result in no cover being provided under the travel insurance. If travel is absolutely necessary, please contact the applicable Account Manager to find out whether insurance cover can be purchased.
Repatriation is not included in the basic cover provided by travel insurance. Repatriation for medical reasons is, however, covered. Please take this into account.
Please note: the communication issued by the Dutch Association of Insurers (Verbond van Verzekeraars) dated 3 March 2020 concerning travelling to affected areas, states that travelling to an area where there is a Coronavirus outbreak and in respect of which Code Orange or Code Red travel advice has been given, can result in no cover being provided under the travel insurance. This is not only relevant to individual travel insurances, but also to group travel insurance. Please be aware of this if you allow your employees to travel to affected areas (this is independent of your duty of care as an employer and any claims that may ensue from that).
Aside from any questions in relation to cover, it is important to prepare properly for consequences that the Coronavirus will still potentially pose. Developments during recent weeks, where the virus has spread quickly in northern Italy and where various cases have also been confirmed in the Netherlands, already stress the importance of proper preparations. Important questions that should then be answered are:
- What measures (government and otherwise) will hinder your company’s continuity? Consider, for example, the closure of roads, airports, border crossings, but also import and export bans and full closure of a building.
- What operational processes can be affected by the Coronavirus, for example, because of staff shortages (quarantine – whether precautionary or not – and/or illness), a shortage of raw materials, transport restrictions?
- Which contractual obligations may you possibly not be able to fulfil? Are there any consequences associated with that, or can you invoke any articles in your agreements, meaning you are not liable for damages?
- Can quarantined employees carry out their work from home? Do additional measures have to be taken to that end?
- How can you prevent the virus from spreading amongst your employees?
- How will crisis management be implemented within your organisation? Does your crisis plan provide for these kinds of situations? Are the various tasks clear and is everyone aware that a further spread of the Coronavirus could result in the crisis team being called into action?
The answers to the above questions can form the starting point for preparing an effective action plan. In each organisation, additional questions will be of importance. MontClair will help you to think of the best possible solutions. Please feel free to contact your Account Manager should you need information or advice.
Other focus areas
- If you see an increase in your stocks of raw materials, semi-finished goods and/or finished goods (as a result of “hoarding” or being unable to deliver these), we strongly advise you to talk to your Account Manager in order to assess together whether the insured sums are still sufficient.
- MontClair has also prepared itself for the potential effects of the Coronavirus, which – amongst other things– has translated into a crisis plan for its own business operations. This means that we are and will remain available for you at all times. In the first instance, we will always refer you to your own Account Manager, but if this person is not available when you need them (for example, on account of illness), please feel free to contact:
- Patricia Schellen (+31 (0)6 519 178 13), or
- Duncan Berrevoet (+31 (0)6 834 415 54).