Are you insured against COVID-19?

Are you insured against COVID-19?

Many are scrutinizing policy wording after lockdown

By Willie Griessel

04 April 2020

The Coronavirus pandemic turned the whole world upside down almost overnight. Certain industries are suffering a lot more than others, but the devastating impact it has on especially small and medium businesses will remain for a long time to come.

The World Health Organisation declared the Coronavirus as a health emergency on 30 January. As South Africans, we had no idea at the time how the virus will impact our lives.

The reality of it only materialised once president Cyril Ramaphosa announced the drastic step to lockdown the country for 3 weeks commencing on 27 March 2020.

Is my business covered?

Since the start of lockdown we have received numerous inquiries from concerned business owners about whether business interruption insurance provides the necessary cover for loss of income due to the Coronavirus, and if there is no cover, whether insurers will be willing to grant the necessary cover now.

Normally, business interruption insurance covers loss of income as a result of damage under the fire and allied perils section, namely damage as a result of fire, storm, wind, water, lightning and earthquakes. Cover for loss of income as a direct consequence of an infectious disease such as COVID-19 and specifically regulations that are imposed by the government in an attempt to curb its spread, is not commonly included in insurers’ policy wording.

However, there are specialist products that have been extended to include this cover, but it is not common.

If this cover is not already included in your policy, the probability that insurers will grant the cover at this stage is very slim, since the pandemic has already been identified and can no longer be regarded as an accidental or unforeseen event.

We do not foresee that insurers will cancel the cover with a 30-day notice period, because although insurers find themselves in an uncomfortable situation, and although they are faced with immeasurable claims and losses, they are obliged to honour cover that have already been granted.

Unknown territory

The last comparable occurrence was more than 100 years ago with the so-called Spanish Flu pandemic (1918). The previous cases of severe acute respiratory syndrome (SARS) in 2003, swine flu (2009), Ebola (2014) and Zika (2016) and the regulations at the time to combat it, is not comparable with the Coronavirus pandemic and the reaction to it.

Insurers therefore find themselves in unfamiliar territory since there is no history of claims for business interruption under similar circumstances to refer to.

The cover that has been granted by a handful of insurers for certain commercial products in the event of a pandemic, have room for different interpretations. It appears that the interpretation of the cover has not been clarified yet, since any inquiries are referred to the claims- and legal departments.

After the government forced most business in the country to close on 27 March, we are of the opinion that the current situation is included in the definition of the insurer in question, but we are keen to see how it will be applied in practice if claims are officially registered.

Below is an excerpt of one of the leading insurers’ policy wording:

“contagious or infectious notifiable disease within the radius stated in the schedule of the Insured’s premises provided that the municipal, regional, local or government authority responsible for the area has declared a notifiable medical condition or communicable disease to exist within the area and/or has imposed quarantine regulations and/or has acted to restrict access to the area in terms of any local, municipal, regional or national law, by-law or regulation pertaining to public health and safety”.

We advise that you consult your insurance adviser to investigate whether you have cover on your policy for losses as a result of the forced closure of businesses.

It is also a good time to review your insurance portfolio to ensure that insured values and cover is still appropriate.

It is also necessary to perform a risk management plan to ensure that any further risks and liabilities that your business is exposed to is addressed while your business is closed.

Many of us find ourselves in a fight for financial survival at this stage and cashflow management is of utmost importance. Ask your insurance adviser for suggestions about how you can save on your insurance premiums in the short-term without taking on too much risk.

The most important thing, however, is that we stand together, support each other, comply with regulations, and avoid resorting to panic. Together, we will get through this stronger than before.

Willie Griessel is a director of ProVérte Wealth & Risk Management and also head of short term insurance. Contact him at

Although all possible care was taken in the drafting of this document, the factual correctness of the information contained herein cannot be guaranteed. This document does not constitute advice and anyone planning on taking any financial action based on this document, is strongly advised to first consult with their personal financial advisor. ProVérte Wealth & Risk Management is an authorised financial service provider with FSP no. 5966.

.section-post-header {
background-color: #305f83;
color: #fff;
background-image: url(;
background-attachment: fixed;
background-position: center;
background-repeat: no-repeat;
background-size: cover;
height: 400px;
vertical-align: middle;

We use cookies to improve your experience on our website. By continuing to browse, you agree to our use of cookies