Abstract

Article

Coronavirus Insurance

The current  catastrophic virus infection and its financial consequences may raise several issues relating to different forms of insurance, such as Liability Insurance and Business Interruption Insurance.

 

It is impossible to state general principles because the terms and language of the policy particular to a claim will control the result.  This may vary totally from policy to policy, both as to the insuring promise and the presence of exclusions, and even to the construction of the policy, having regard to its terms as a whole. This discussion is designed to bring up and superficially elucidate some matters which must be considered.

 

Many Commercial General Liability Insurance policies,carry exclusions relating to biological contaminants, which would seem to be germane only if the claim is based on harm which is caused by contamination, for example, property damage through its affection by contamination with the virus, requiring its destuction.  It would prima facie not be appropriate to simple direct physical infection of the victim by the victim, which presumably would require a clearer expression in order to achieve that effect.

 

Another common exclusion is triggered if the claim is based on bodily injury from inhaling or ingestion of, inter alia, pathogens pathogens, which is wide enough to include this virus, but this may be qualified by a definition, and the process may be confined by the terms to the interior of a building or structure.  The exclusion may be subject to relevant exceptions, including what is sometimes called a ‘consumption exception’.

 

Business Interruption Insurance generally covers incomes losses when the insured business cannot operate because of factors outside its control, but the specified triggering factors may not include a virus.

 

A few of these policies contain a Civil Authority clause which provides for indemnity for monetary loss from an order of a civil authority which prevents the insured from having access to its business or commercial premises. Such an order is necessary to the trigger, and a premature closure will not engage it; and the insured’s failure to do so may render it liable in negligence for which it must rely on cover by its Liability Insurance, such as it may be.

 

All Risk Insurance  policies may have an insuring promise which is arguably wide enough to engage coverage for loss from this source, but many contain a communicable disease exclusion.

 

Income Insurance and will involve an issue as to whether the relevant person is incapacitated from work.  His heart or lung condition or diabetes may make it dangerous to work in an activity where there is any significant danger of cronavirus infection, and if that is the only form of employment available to him, the cover is prima facie triggered so long as the threat exists.  If he is capableof sheltered work which is available, the usual principles apply.

 

Workers’ Compensation Insurance is more complicated because of the need that the disability from working must be due to the work injury, and if that were not the  case because of the danger of the virus to his vulnerable condition, the work injury would not have been the cause of his inability to work while the danger was present. It would be otherwise if the work injury caused the vulnerability.

 

Event Insurance provides indemnity for loss arising out of the cancellation or interference of an organized event by a cause which is outside the organizer’scontrol.  A cancellation or termination of an event because of the danger from this virus would in the present circmstances amoount to a trigger for the cover.  According to the policy’s terms commonly used, the decision need not necessarily be due to conformity with a mandatory order by a public authority, and may be the result of a commercial recognition of the effect of the threat on the commercial viability of the event. The onus of proof of this would lay on the insured, but a reasonable rather than a strict meaasure would be applied by a Court.  The measure of the covered loss should be clearly stated by the policy.

 

There is a danger that a multi-covered insured may fall between many stools.

 

Much the same issue may rise in respect of the Act of God or force majeur provisions in many leases. The resoning in some authorities from that topic may be applied by analogy to insurance, but only with considerable caution because of the different legal contexts.