Which insurance covers Corona damages? ​What do you have to do to not lose coverage?

Monday, 16 November 2020

Insurance companies insure uncertain risks of individuals that may arise in the future and cover such risks with the premiums of the insured community. Once the risk has already occurred or is about to occur immediately and one does not have taken out insurance already, it is not possible to get insurance cover anymore.

However, if one has proactively taken out appropriate insurance policies early enough, notification and information obligations now arise that one needs to consider in order not to lose insurance coverage:

Your business (eg bar or nightclub) is not allowed to open?

Business interruption insurances cover such risks; depending on the respective insurance policy, you will usually be reimbursed for a period of 12 months. However, most business interruption insurances only provide coverage in case of property damage (caused by fire, floods, etc.) that leads to business interruption and therefore usually do not apply in the event of a pandemic. The (more expensive) all-risk business interruption insurances have a wider coverage scope. However, such policies in most cases also do not provide coverage in the event of a pandemic (unless pandemics and/or infectious diseases are expressly designated as an insured risk).

In any case, companies should check the scope of coverage of their existing insurance policies and, if necessary, notify the insurer quickly if an insured event occurred (interruption of business due to the Corona crisis).

You've been quarantined and you can't work?

Self-employed and freelancers who cannot work due to the Corona crisis (home office is possible in many sectors and does not prevent many people from working in general) lose their income if they cannot work. Quarantine Such insurance is always recommended for freelancers and covers both the ongoing fixed costs of the business as well as profits withdrawals, necessary to cover the general costs of living.

Especially for farmers, gastronomy and food industry businesses, a so-called epidemic business interruption insurance provides compensation for lost profits and coverage for the running costs. Again, it is necessary to review existing insurance policies quickly and notify the insurer immediately.

You have booked a trip and have to or want to cancel?

If you or one of your fellow travelers falls ill, this generally constitutes a usual cancellation reason and an insured event. The whole family could cancel at the expense of the insurer.

However, if the illness occurred due to the Coronavirus, the situation has changed, because the WHO has classified the virus as a "pandemic", and pandemics are commonly excluded in insurance terms and conditions. The actually ill people would not be insured pursuant such insurance conditions.

Recently, the first instance court Oberwart ruled in connection with a package holiday that if such holiday is interrupted due to a corona-related travel warning, the holiday price must be refunded. is the court stated that it would be unreasonable for the package travelers to evaluate infection rates and restrictions in a foreign country with a foreign language and to trust that the return trip will take place at the planned time It remains to be seen whether the instance courts will confirm this decision.

 You have planned an event and have to cancel it?

Events can be insured against a variety of cancellation reasons. Such insurance covers cancellation costs incurred despite the cancellation of the event.

For obvious reasons (see above), however, it is currently not possible to conclude cancellation costs insurances that cover medical risks.

Excursus: Homeoffice under casualty insurance?

Finally, a sneak peek into social security law: At the beginning of the Corona crisis, the general shift to home office also raised questions of social security law. The Austrian Trade Union Federation (ÖGB), for example, asked how cases would be handled (e.g. if someone working from home office falls down the stairs or stumbles over a child's toy and injures himself).

With the 3rd COVID-19 Act the General Social Security Act (ASVG) and the Civil Servants Health and Casualty Insurance Act (B-KUVG) now explicitly include home office activities in their scope of coverage and define home office as a workplace. In this case, unfortunately, this – in our opinion very reasonable - regulation only applies for the duration of measures to prevent the spread of COVID-19 according to the COVID-19 Measures Act and will expire on 31 December 2020. These amendments will apply to insurance cases that occurred after 11 March.

From a legal policy point of view, we hope the legislator will recognize home office, which has already been widespread in the past and is further expanding because of COVID-19, but also the entire private sector (!), should have been included in accident insurance cover in general for a long time. Well understood is the difference resulting from the historical background, which however no longer reflects the actual living situation of the people living and working in Austria in modern times.

Your contact persons:

Felix Hörlsberger
Head of the Insurance Practice Group
T +43-1-533 4795-17

Magdalena Nitsche
Expert for Insurance
T +43-1-533 4795-17