Coronavirus Outbreak: Insurance coverage

CoronaAlliance Insurance Coverage

CoronaAlliance Insurance Coverage

Insurance coverage under the pandemic – scope, risks, opportunities

Insurance contract is an agreement in which a person agrees to make compensation or to pay a sum of money in case of contingent loss or any other future event specified in the contract, and another person agrees to pay therefor a sum of money, called a premium. Insurer means the party who agrees to make compensation or to pay a sum of money. Assured means the party who agrees to pay the premium money. Beneficiary means the person who is to receive compensation or to be paid a sum of. The assured and the beneficiary may be one and the same person.

Insurance companies: Thailand’s insurance companies are regulated by the Office of Insurance Commission, an independent government agency. Foreign insurance companies might be licensed with respect to their branch office in Thailand. Foreign insurance companies without Thai licensed branch office can underwrite insurance outside of Thailand. This exposes the policyholder to the risk that he cannot enforce his claims in Thailand. This will therefore only be an appropriate approach if the desired insurance cover is only available offshore.

Non-Life Insurance Act has been introduced in 1992. Non-life means any damage which may be estimated in money terms and shall also include loss of rights, interests or income. Under the NLIA, any insurance policy needs to be approved by the regulatory body with respect to content and form. If a wording is used which deviates from the approved wording, the insured party has the choice to choose the approved wording version. 

Seven insurance policies to (not) cover the pandemic – the cardinal requirement of a direct physical loss 

#1. Business interruption insurance is intended to protect businesses against income losses sustained as a result of disruptions to their operations. It is typically part of a commercial property insurance policy. It might require a direct physical loss of or damage to the insured property. In such a case, it is decisive whether the pandemic results in such direct physical loss. A distinction must be made between cases in which a business is closed by the authorities and cases in which customers or visitors are prohibited from entering the business premises. In addition, there are cases in which business operations can no longer continue due to the general curfew or even without official measures.  Coverage might be further limited to the actual loss of business income due to the necessary suspension of business operations during the period of restoration.

#2. Property and contents insurance cover damage to the property and valuable equipment. Typically, the contamination of the property with the Coronavirus will not easily qualify as damage to the property, although it might have a similar impact. 

#3. Public liability insurance might be applicable in cases of claims by infected guests or in cases of commercial defaults triggered by the pandemic. These claims might be covered by commercial general liability insurance policies.

#4. Professional liability insurance: Hospitals and similar businesses might possess additional professional liability coverage for errors and omissions that result in professional malpractice. Typical cases are negligence, misrepresentation, violation of good faith and fair dealing, as well as inaccurate advice

#5. Directors and officers insurance cover the top management of the company against damage claims by the company’s shareholders. 

#6. Social security insurance is mandatory under Thailand’s Social Security Act. Social security insurance provides free healthcare at selected public and private hospitals, but facilities covered by the scheme tend to have long queues and reputations of having low-quality care. It remains to be seen whether risk-increasing circumstances for which the insured himself is responsible will limit the insurance cover. 

#7. All risks insurance is generally a category that does not include the causes and circumstances listed in particular. If a type of event is not listed in the policy, then it is probably not covered. Instead, in case of all-risk insurance, all damages are covered except those that are expressly excluded from coverage under the policy. Under a policy commonly known as an “Industrial All Risks Insurance Policy” (IAR Policy), the insured is not covered  for  financial loss due to interruption or interference to business, unless the IAR Policy is extended to specifically cover “business interruption.”

#CoronaAlliance – Legal assistance and tax advice in the management of the Coronavirus crisis

PUGNATORIUS Ltd. is the Bangkok-based specialist provider of transactional legal and tax advice on foreign investments in Thailand’s manufacturing and service industries as well as property developments and acquisitions. The law firm sees the pandemic as a challenge to protect and enforce the legal and economic interests of international clients in a dynamic situation with high-quality and pragmatic advice and action. 

CoronaAlliance: As a founding member of the CoronaAlliance, the law firm advises on the legal implications of the Coronavirus outbreak as well as on tax planning opportunities. It also provides consulting on short-term and long-term measures to avoid or mitigate the damage to companies, individuals, and institutions. It provides guidance in the transition process to the post-pandemic world to protect clients’ assets, wealth, and business. #CoronaAlliance

Policy review: The firm checks the insurance policies for gaps in coverage, unclear wording, and potential insurance claims. It develops for corporate clients a strategy to claim insurance coverage. Potential action could be, for example, to work towards closure of a business ordered by the authorities, if this is favorable within the framework of the policy.

Disputes: The law firm represents the interests of policyholders vis-à-vis the insurance company. This includes the out-of-court representation of interests or even an insurance lawsuit. Class actions are professionally conducted by cooperation partners.

The professional services linked to the effects of the outbreak of COVID-19 are explained at “Legal support and assistance regarding the effects of the #coronavirusoutbreak”.


Disclaimer: A little knowledge is a dangerous thing. This low-resolution high-level outlook constitutes neither legal advice, nor an attorney-client relationship, nor equips with the insights, tools or skills to do this without the CoronaAlliance. Don’t wait for the storm to pass, learn to dance in the rain.

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