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RISK IN CONTEXT

Insurance Considerations During a Pandemic

Tuesday, 30 June 2020

The COVID-19 pandemic has changed our way of life, as we know it and has required all of us to adapt to a new way of working. It is vital that businesses in the Middle East and North Africa (MENA) are aware of the evolving impacts and have suitable recovery plans in place in order to make the right business decisions. Employees are in need of clear and concise leadership during a time like this.  

The appropriate type of insurance and coverage can provide your business with the appropriate financial protection during this unprecedented period of disruption. Seeking professional advice from insurance consultants and risk advisors will help your business recover and rebound. Your insurances exist to respond to the unexpected and unknown, therefore we recommend that you:

  • Engage with your trusted insurance broker and legal advisor early
  •  Carefully read and understand your insurance policy and whether it would respond to certain events

In order to be ready for any possible COVID-19 exposures, businesses must be mindful of the following impacts:

Working from Home

Many employees are working remotely, resulting in an increase in the number of pieces of equipment being used at an offsite location. Such assets are covered under an existing property policy whilst declared at a business location; however, they can also be extended whilst being at off site locations too. It is recommended that equipment and its associated values are identified and notified to your insurer.

In other circumstances, employees may use their own personal computer, which could lead to data being compromised or stolen, such a loss would not typically be covered by your business property insurance, therefore, and we recommend you check that your Cyber policies are updated to ensure such exposures are covered. 

Whilst employees continue to work from home, normal working hours are changing. Employees are witnessing different working hour patterns that may extend beyond normal working hours. Accordingly, employers should be safeguarding the health and safety of employees and cover them via your workers compensation insurance. Workers Compensation policies should be extended to include cover while working from home during and outside office hours. 

Silent Risks

Assets situated in different industries have been affected due to lockdown activities whether partially or fully. This may have resulted in certain assets going on full lockdown without any activity for a certain period of time (silent assets). Property policies would require that activity be carried out at your business location to allow cover to be available. Clients should ensure their property insurance policies are extended to guarantee that silent risks are fully covered due to the lack of activity brought on by the current pandemic.

Relaxing Restrictions Notification/Claims

Various insurance policies will include a claims notification timeline. The requirements could be mandated by a certain timeline or by an “As Soon As Possible” notification, accordingly, the failure to properly notify an insurer, risks a subsequent claim in dual time, which could affect the claims process. Insurers should be asked to relax such notification requirements to ensure that delays in claims notifications made during pandemic lockdown does not affect an insureds rights.

Similarly, insurance policies may also have declaration cover requirements, such as Marine Cargo declarations, which could leave clients exposed to certain incidents. We recommend that you put in a request to relax such declaration requirements during this period to avail cover.

What next?

With economies starting to open up and relax restrictions, it is important for clients to identify the impact that new ways of working, including working from home, have on your business activities and how your insurance policies can align and adapt to the new changes to ensure adequate cover and continuity of business. Marsh specialists and advisors are best suited to assist clients in identifying and negotiating areas of improvement required with insurers.

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