As the effects of coronavirus continue, organizations and companies are now considering whether events in late 2020 and early 2021 may occur or need to be converted to virtual events. What are the insurance effects of these changes and cancellations? To take these important decisions into account requires a review of both insurance termination insurance and a consideration of force majeure and other such issues.
On the insurance front, many policyholders bought insurance breaks for many years for events in 2020, 2021, and even as far as 2024. Such policies, purchased before mid-March 2020, generally provide explicit coverage of "repurchases" for losses from " infectious disease. " That is, the policyholders paid an extra, specifically identified premium to remove all exclusion for communicable disease from these insurances. Usually, these policies do not use the word "virus" but rather "contagious disease"; and excludes none of them. These policies usually cover a specified net profit and include additional coverage for "Cost of remedial action", "Future marketing costs", etc. in addition to the specific coverage amount.
These policies often require both attention to circumstances and notification of the claim. Due to the lead time required to plan for the types of events typically covered by such a policy, and to plan a conversion to a fully virtual format, many policyholders are now considering whether their early 2021
As the amount of the loss becomes clear, the policyholders should submit proof of loss statements. How these losses are presented often depends on the policy language and the type of losses in question. Policyholders should review their policy to understand if they include a time limit for submitting proof of loss (or a time limit for the policyholder's right to sue).
While many policies apply to events scheduled for 2021 and beyond, of course many do not. Policyholders who purchased such coverage after mid-March 2020 have limited coverage of infectious diseases. Those who bought coverage of events after April 2020, now have a full exemption for COVID-19. These policyholders have usually not been able to get the same repurchase of the transferable sickness cover found in cancellation policies purchased before mid-March 2020. Policyholders should start as early as possible this year and next on their renewals. Consulting an experienced insurance adviser is recommended to assist policyholders to carefully review application issues and proposed language changes and consider the effects of such changes across coverage.