It would be hard to think of a clearer example of a global emergency, affecting virtually all areas, than the worldwide healthcare, social and economic crisis caused by COVID-19. Practically all companies, regardless of the sector in which they operate, have been, and unfortunately continue to be, affected by the coronavirus pandemic.
Since the second quarter of 2020, many companies and businesses have been forced to close down, reduce working hours, stop production, make changes in their organisation and work methods, and in some cases even change their activity.
We are now in 2021 and the situation is still overshadowed by insecurity and uncertainty. Many company managers, self-employed workers and professionals are asking themselves how they can cover the losses caused by coronavirus.
Traditionally, companies have taken out insurance policies of various types to limit or mitigate the consequences of accidents, floods, financial or equity risk, and numerous other contingencies. In the case of COVID-19, some insurance policies also cover losses or transfer responsibility to insurers.
Below we will see what types of insurance can cover financial or other losses related to coronavirus and, in some cases, what modifications we should make to insurance policies to avoid problems when claiming compensation.
Civil Liability Insurance
Although Civil Liability insurance does not normally provide direct cover for the financial losses caused by coronavirus, it is a very comprehensive type of insurance that gives the insured party substantial protection, covering a wide variety of accidents and contingencies that can damage the company itself or third parties.
In the current situation, which is overshadowed by the pandemic, many companies have changed their activity, sometimes substantially, as a result of coronavirus. For example, companies in industries as varied as automotion and textiles have changed their system of production to support the healthcare sector by manufacturing ventilators or protective clothing and other items for doctors, nurses, etc. In this respect, even if it is a temporary change of business activity, it is important to inform the insurance company, so that the conditions of the policy can be changed if necessary, thus avoiding problems if compensation is claimed for any reason.
D&O Insurance (Civil Liability of Directors and Officers)
D&O insurance, which protects the personal and family assets of directors and senior managers when performing their managerial duties in a company, has become especially important during the pandemic.
Although Royal Decree-Law 8/2020, of 17 March, on extraordinary urgent measures to address the economic and social impact of COVID-19, frees directors from debts incurred during the state of alarm, this does not mean that when the state of alarm ends, or responsibilities can no longer be attributed to coronavirus, the company’s directors cannot be held responsible again. In these cases, D&O insurance is one of the safest types of protection.
Cyber-risk insurance
The pandemic caused by COVID-19 has led to a significant increase in computer crime. This is perfectly understandable, as the increasing numbers of people working online and the growth of online shopping have created ideal conditions for hackers and cyber-criminals to try to get sensitive data or usurp users’ identities to take control of bank accounts and sabotage and blackmail companies.
A cyber-policy is a complete product that combines compensation for damage to your company and to third parties. Sometimes, it also provides protective measures to ensure that the computer incident does not occur.
Reviewing your policies is essential
As the pandemic caused by COVID-19 is a new contingency, the consequences are not the same as those caused by other emergencies and sometimes they are not covered by insurance policies. For this reason, it is highly advisable for the company to review its policies with its insurer and modify them if necessary, always in accordance, of course, with current legislation.
