Coronavirus: Which damages are covered by insurance?
The Covid-19 virus has a major impact on the daily lives of people and businesses globally. However, the hardships that the Coronavirus is causing, especially economic ones, can be mitigated by insurance, to a partial extent.
The emergency situation generated by the Coronavirus has left many entrepreneurs and individuals in ambiguous and uncertain situations regarding compensation by insurance companies for the economic damage caused by the pandemic. Insurance protection in the event of damage caused by the Coronavirus is in fact of different scope and coverage: insurance instruments can only provide partial coverage if certain conditions occur and only in certain areas.
The following is the latest information on insurance cover for specific cases.
Daily sickness allowance insurance
This cover applies as long as the insured person holds a medical certificate proving the illness. On the other hand, cases of quarantine imposed, unless proven by a medical certificate, do not have protection. In cases where the child is ill and one of the parents has to stay at home to treat him/her (but tries to find suitable alternative solutions to limit the period of absence), the insurance does not cover these cases, even though this is a material right of the employee (CO Art. 324a).
Business interruption insurance due to epidemics
If the entrepreneur is forced to stop operating due to an epidemic, insurance cover can provide a fair level of protection, but only in the catering industry. The cover is only intended for hotels, restaurants and bars and generally covers cases of infected food. Even "orders issued by the competent authority with individual notification to close down the activity carried out by the insured beforehand" are in some cases included, perhaps only up to the declared pandemic stage: it is therefore advisable to notify the damage through your insurer or intermediary.
LADI unemployment insurance
This social insurance is the instrument of "partial unemployment" on which the Authority now relies in order to protect entrepreneurial activity and jobs. The insurance covers for a specified period of maximum 12 months 80% of the unpaid remuneration of employees whose activity has been reduced. All employees can benefit from reduced work, except for those who have a terminated or fixed/temporary employment contract. The employer can assert his right to the allowance by agreeing the new measure with the employee and submitting the application for short-time work to the cantonal office within 1 day.
LAMAL health insurance
It's a foregone conclusion. In recent days, the Federal Department of Home Affairs (FDHA) has decided to add the cost of the coronavirus test to the list of remunerated tests (to be considered the deductible).
Accident insurance in accordance with the Federal Law on Accident Insurance (LAINF)
Coverage is provided for occupational diseases which, in this case of an infectious nature, affect people working in hospitals, laboratories, experimental institutes and the like (OLAINF Annex 1). However, the cases are assessed individually by the insurers.
Travel cancellation or assistance costs shall be borne only in cases of proven illness. By contrast, "epidemics/pandemics/quarantines" or any "grounding" of airlines are not considered by all insurers. However, it also depends on the assessment of the companies themselves on how to deal with cases: who considers cases of travel to destinations where the presence of the virus is officially confirmed, who considers cases of travel to destinations where quarantine is in force or is blocked at landing, who still only for travel to China or Italy. Assessments will evolve continuously, so it is advisable to always announce claims to your insurer or intermediary.
Event cancellation insurance
This niche coverage in favour of event organisers is difficult to respond positively to the current crisis, with exclusions for "influenza viruses" or the danger of or fear of communicable diseases, unless the Place is closed by government order due to the emergence of the virus in that specific Place.
It is important to circumscribe the areas of "guilt" from those of "force majeure", which concern extraordinary and unforeseeable external events which are beyond human control and therefore beyond the responsibility of a contractual party and which cannot be avoided even with the utmost care and attention. For these cases, the CO art. 97/119 provides for the possibility of cancellation of the contract, with consequent release from the organisers' performance obligations, but with reimbursement of the service already received.
How to receive assistance
RVA Associati SA, a well-established international insurance broker active in the Ticino market for 25 years, is available for specific advice in the field of risk management through insurance measures. Contact us for assistance.