The head offices of Caisse Desjardins are seen, Wednesday, February 24, 2021 in Montreal.THE CANADIAN PRESS/Ryan Remiorz

The head offices of Caisse Desjardins are seen, Wednesday, February 24, 2021 in Montreal.THE CANADIAN PRESS/Ryan Remiorz

Desjardins drops disease-related liability, property damage coverage for some claims

Company said it will not cover them in the event they are sued for spreading a communicable disease

Insurance experts say consumers can expect more companies to introduce exclusions around COVID-19 after Desjardins dropped liability and property damage coverage related to communicable diseases.

In an undated letter to clients, the Montreal-based company said it will not cover them in the event they are sued for spreading a communicable disease, nor will it cover decontamination or property damage costs related to those diseases.

Desjardins public relations advisor Jessica Spina said the change in policy came after the reinsurance market started using communicable disease exclusions.

“Therefore, we wanted to define communicable disease in our policy wordings,” she said, in an email.

The Insurance Bureau of Canada, which represents the country’s insurance agencies, said the international reinsurance market has added these exclusions with Canadian insurers because pandemic risk is too widespread to reasonably insure.

“Generally, pandemic risk is not insurable as the insurance industry is… unable to diversify this risk due to it affecting all of the world at the same time,” said Vanessa Barrasa, a spokesperson with IBC.

Insurance experts around the country say they expect other providers to introduce similar exclusions to their coverage, depending on the level of risk they’re willing to take on.

“The name of the game in the insurance industry is to try and accurately estimate risk,” said Ian Lee, an associate professor with a background in insurance at Carleton University.

“It’s very difficult right now to estimate aggregate risk when the pandemic is mutating and coming up with different versions, and there’s different opinions from public health about how to deal with it.”

That’s why some insurance providers will want to wash their hands of certain coverage aspects for COVID-19, said Lee.

The IBC said the pandemic has presented challenges for insurance companies, especially as the pandemic coincided with an expensive year for weather-related claims.

It said Canadian insurance companies handed out $2.4 billion in payouts in 2020, although it’s hard to say whether all providers were negatively impacted because of the different risk profiles that insurers take on.

James Colaco, who leads Deloitte Canada’s insurance sector practice, said certain companies like auto insurance providers actually benefited from the pandemic, since most people continued to pay their premiums while driving less, therefore submitting fewer claims.

But he said providers who deal with small businesses have been hit hard after COVID-19 lockdowns led to many companies filing claims for business interruption payouts.

Anne Kleffner, a University of Calgary professor specializing in insurance and risk management, said the picture is murky on what insurers will and will not be required to pay for surround the pandemic.

She pointed out that some insurance companies were able to avoid paying for small business interruption claims, since some of those agreements are based on property damage, which wasn’t a factor during the pandemic.

Kleffner and Colaco said it will be interesting to see if the courts force insurance providers to pay for pandemic-related claims in the coming years, such as for business or liability claims.

“When insurers have to deal with the letter of the policy versus dealing with the public issue, things get thorny invariably,” said Colaco.

Salmaan Farooqui, The Canadian Press


Like us on Facebook and follow us on Twitter.

Coronavirusinsurance

Just Posted

Justin Bond’s Bahrain 1 took a team around a year to construct. It gets its name because the Sheik of Bahrain is a major sponsor of the team. / Photo courtesy of Justin Bond.
Mission dragracer wins Atlanta race, ousts back-to-back world champion

Justin Bond goes quarter-mile in 5.738-seconds, beating champ Stevie ‘Fast’ Jackson on home turf

Former UFV Cascades wrestling coach Arjan Singh Bhullar is now the ONE heavyweight champion after defeating Brandon Vera via TKO in round two on Saturday in Singapore. (ONE Championship)
Former UFV wrestling coach wins MMA championship

Arjan Singh Bhullar captures ONE heavyweight title, first Indian origin fighter to achieve honour

Jamie and Erin O’Neill, who are renting a 107-year-old house at 45837 Knight Rd., are wanting to save it from the wrecking ball and move it when it comes time for the owners of the house to build a new house on the property. They are pictured here outside the home on Tuesday, May 11, 2021. (Jenna Hauck/ Chilliwack Progress)
Chilliwack couple wants to save 107-year-old home from demolition, asking for community support

O’Neills have less than year to find new property, raise funds to move Knight Road house

Archway Community Services is among local agencies receiving one-time grants through the Civil Forfeiture Crime Prevention and Remediation grant program. (Photo courtesy of Archway)
Nine Abbotsford projects receive $345K in civil forfeiture grants

Funds awarded to projects aimed at prevention of crime and domestic violence

Karl Eha showing off a fishing rod that was originally made in 1972. Patrick Penner photo.
Mission’s Eha Sports offering store credit for old fishing gear, plans to donate to poor Latin American children

Karl Eha recalls time as hungry kid in post-war Germany, says fishing kept him full

Daily confirmed COVID-19 cases reported to B.C. public health, seven-day rolling average in white, to May 12, 2021. (B.C. Centre for Disease Control)
B.C. preparing ‘Restart 2.0’ from COVID-19 as June approaches

Daily infections fall below 500 Friday, down to 387 in hospital

The Independent Investigations Office of BC (IIO) (File Photo)
Police watchdog investigating after man found dead in Surrey following a wellness check

IIO says officers ‘reportedly spoke to a man at the home before departing’

On Friday, May 14 at Meadow Gardens Golf Club in Pitt Meadows, Michael Caan joined a very elite club of golfers who have shot under 60 (Instagram)
Crowds at English Bay were blasted with a large beam of light from an RCMP Air-1 helicopter on Friday, May 14. THE CANADIAN PRESS/Marc Grandmaison
Police enlist RCMP helicopter to disperse thousands crowded on Vancouver beach

On Friday night, police were witness to ‘several thousand people staying well into the evening’

People shop in Chinatown in Vancouver on Friday, February 5, 2021. THE CANADIAN PRESS/Jonathan Hayward
Vancouver community leaders call for action following 717% rise in anti-Asian hate crimes

‘The alarming rise of anti-Asian hate in Canada and south of the border shows Asians have not been fully accepted in North America,’ says Carol Lee

Sinikka Gay Elliott was reported missing on Salt Spring Island on Wednesday, May 12. (Courtesty Salt Spring RCMP)
Body of UBC professor found on Salt Spring Island, no foul play suspected

Sinikka Elliott taught sociology at the university

The first Black judge named to the BC Supreme Court, Selwyn Romilly, was handcuffed at 9:15 a.m. May 14 while walking along the seawall. (YouTube/Screen grab)
Police apologize after wrongly arresting B.C.’s first Black Supreme Court Justice

At 81 years old, the retired judge was handcuffed in public while out for a walk Friday morning

Surrey RCMP in the 4900-block of 148th Street, a short road just off of King George Boulevard, on May 15, 2021 after a male was allegedly assaulted with a “pipe-like” weapon that morning. (Photo: Shane MacKichan)
Surrey RCMP investigating after person reportedly injured with ‘pipe-like’ weapon

Police investigating incident in the 4900-block of 148th Street

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Most Read