Have a listen to my podcast discussion with the editor of Cover magazine on the potential implications of COVID-19 on the insurance industry in South Africa.
We discuss business interruption insurance, liability insurance, event cancellations and travel insurance. Where to start in evaluating insurance exposure for brokers, insurers and reinsurers is covered.
Traditional business interruption cover usually requires ‘physical’ loss or damage that affects the operation of the business. The definition of ‘damage’ and ‘physical damage’ will be important in interpreting whether extensions and exclusions relating to bacteria, viruses and pandemics apply.
We discussed the problem of the unknowns relating to COVID-19 and various scenarios, for instance the case where there is social isolation due to fear of contamination in circumstances where there is no known contamination, and how this may affect business interruption insurance. The need for business owners to take sensible precautions and reasonable steps to prevent a claim, as well as the separate duty to mitigate a loss, and how those may be balanced, is also an issue.
Finally, while COVID-19 poses many problems for insurers and insureds, some insurers are looking at specific travel cover for this period, as an opportunity for a new type of cover to be provided.