Lockdown govt-imposed, insurers must pay for losses: Brokers Assn

BENGALURU: After GIC put put a public advisory that “Coronavirus” is not an insured peril; and so insurers will not be paying for “loss of profit” and “business interruption,” brokers have now written to IRDAI asking for a change in stance as businesses across India are facing losses, running into crores.

The Indian Brokers Association of India (IBAI), whose clients range from IT giants, FMCG manufacturers to small businesses, has asked the regulator to intervene on the grounds that while the “Coronavirus being a pandemic cannot be covered; the loss from lockdown should be as its government-imposed and not a voluntary action from businesses.”

Also in the case of large industrial complexes and IT buildings - non-occupation because of Covid-19 should not result in loss of coverage, said the broker association. "Our clients are concerned insurers might withdraw insurance coverage due to the government imposed lockdown. Property insurance policies -- like fire/ industrial all risk, erection all risk covers -- generally have a condition stating that insurance ceases to attach if the building containing the property remains unoccupied for a period exceeding 30/15 days unless insurer’s consent is obtained in advance," said Sanjay Khedia, president, IBAI.

Management compliance with government directives on "work from home" for workers should not lead to loss in coverage, reiterated IBAI.

IBAI also feels GIC's advisory to not cover business interruption is not rational. "Whether the lockdown period is to be considered an uninsured delay depends on various factors - so we feels such advisories might result result in outright denial of the claim without even going into merits," said Khedia in a letter to the regulator.

Source: The Times of India