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Businesses are feeling the pinch of coronavirus already - but insurance may not cover their losses

As coronavirus infections continue to rise, some insurance companies have adjusted their benefits to exclude cover for the virus.

Covid-19 has emerged as a major threat to the already sluggish economy, with companies reporting reduced capacity due to the measures aimed at curbing infections.

The country's leading insurance companies have adopted different approaches to personal and business eventualities linked to the impact of the coronavirus, making it crucial for consumers to re-visit their policy documents.

Will my claim be paid?

Momentum says its life cover does not exclude coronavirus infections, which means clients' policies won't be affected if they contract the virus.

"We are, and will continue to pay all valid claims. If a client dies as a result of contracting the coronavirus, the death claim will be paid."

As of Friday, South Africa had 202 confirmed cases, while the first patient diagnosed was said to be almost fully recovered, and no deaths had been reported. 

According to Discovery Life, Covid-19 related illnesses are fully covered under life cover, capital disability and severe illness benefits, regardless of whether the disease was contracted locally or abroad.

Under its income replacement benefit, the company says if a client tests positive for the virus, they will be able to claim if they are they are booked off work for more than seven days from the date of the positive test result being confirmed if a client has a seven-day waiting period.

"We will pay the claim retrospectively from the date of being booked off work for as long as the client with Covid-19 is unable to perform their nominated occupation due to the disease, subject to a minimum guaranteed payment of 14 days.” 

What about cover for my business?

Sanlam says it has extended its assessment of "being unable to work" to include being quarantined on medical advice or by government authority, in response to direct or probable contact with Covid-19.

However, these benefits are not designed to cover business interruption due to either tough economic conditions, or changes in the working environment of health practitioners or other occupations who come into direct contact with clients, according to Petrie Marx , Product Actuary at Sanlam Individual Life.  

Not Business as Usual 

Insurance specialists at law firm Webber Wentzel have advised that business interruption policies may not cover damage arising from the consequences of coronavirus.

They say certain policies require that there must be underlying material damage to insured property to trigger the business interruption section of a policy, and the spread of the coronavirus is unlikely to result in physical damage to insured property.

Hollard said in a circular that the decision to exclude the influenza was due to its global re-insurers not supporting any cover of infectious diseases.

A similar communication by Santam shows that the virus can "no longer be seen as a fortuitous event" for new clients. The virus by been declared a pandemic by the World Health Organisation.

The coronavirus is said to be twice as infectious as ordinary flu, with mortality rates 20 times higher. Government said it would closely monitor the impact of the virus on the economy.

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