INSURANCE ADVISORY ON CORONAVIRUS
We are in the throes of a deadly coronavirus outbreak which originated from China and which has now spread to more than 20 countries. Globally, more than 75,000 people have been infected with more than 2,000 reported deaths. The numbers are increasing daily.
Singapore being a gateway city is not spared and the Government has raised its disease outbreak response level from yellow to orange to manage the situation. As a knee jerk reaction, supermarket shelves were raided and emptied by shoppers which prompted the Government to calm the public not to hoard as there are adequate supplies of basic necessities.
In the midst of all this, opportunists are on the prowl. A retailer was hauled up by MTI for selling a box of masks at an astronomical price of $138. Even scammers and hackers are reportedly taking advantage of the situation to ply their trade with email scamming, phishing and ransomware attacks.
The coronavirus fallout on some sectors of our industry is palpable. F&B has taken a hit with more people dining in. Tourism, Hospitality and Retail sectors have weakened from a marked drop in tourist arrivals and event cancellations. The knock on effects on other sectors like Logistics, Manufacturing and Semiconductor will be severe according to reports.
The picture is grim. Invariably, the question on the lips of many people is “Does my insurance policy cover the coronavirus risk?” Let us take a look.
There are four major classes of insurance that are impacted by the coronavirus:
- Travel Insurance. The General Insurance Association of Singapore has advised that most Insurers consider the coronavirus outbreak a known event which means that coverage is effective only if the policy was bought before the known event.
There appears to be a consensus cut-off date. Many Insurers that we work with consider 22/1/2020 as a known event date for travel to Wuhan and 27/1/2020 to Mainland China. For all other destinations, the cut-off date is 31/1/2020.In other words, Insurers will not admit coronavirus-related claims including trip cancellation, trip curtailment or flight postponement if the policy was bought after the stipulated cut-off dates. Check with your Insurer on your claim eligibility. Consult us if you need advice.
- Business Interruption (B/I) Insurance. If you have this insurance, does it cover you for financial losses as a result of interruption of your operations caused by the coronavirus outbreak?
A B/I Policy will typically respond if the Insured suffers direct physical loss or damage to insured property covered under a property policy. It will also respond if you have contingent B/I extension for disruptions at your Customers’ and Suppliers’ premises.Coronavirus does not cause property physical loss and thus consequential losses are typically not payable. Moreover, the B/I policy typically excludes losses due to communicable and infectious disease. This exclusion is rarely lifted. Check your policy wordings and approach your Insurer for clarification. Consult us if you need advice.
- Work Injury Compensation Insurance. The Ministry of Manpower has clarified that the Work Injury Compensation Act (WICA) “covers employees who contract diseases from biological agents, including COVID-19 arising from and in the course of work. However, WICA will not cover diseases due to COVID-19 if it was contracted through non-work activities or exposure.” Consult us if you need advice.
- Life Insurance. The General Insurance Association of Singapore (GIA) and the Life Insurance Association Singapore (LIA) have issued a joint statement to the effect that integrated shield plans (IPs) and IP riders will provide coverage for hospitalisation expenses related to coronavirus. Many non-IP individual and group health insurance policies will also provide coverage for medical expenses related to coronavirus.
For customers who wish to know more about their insurance benefits and terms and conditions in their policies, GIA and LIA have advised them to approach their financial advisor and/or insurer. Employers with group policies were also urged to review their group policy documents and engage their Insurers about the coverage.
This is our latest insurance newsfeed on coronavirus. If there are major insurance-related developments, we shall update you on our website.
Meanwhile, life goes on! For organizations, they continue to carry on business with their Business Continuity Plans. For all of us, we do our part by washing our hands frequently with soap and water and avoid touching our face with our hands.
The coronavirus situation is evolving. Check the MOH website www.moh.gov.sg for regular updates.