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

Doses of the Pfizer coronavirus vaccine are seen being prepared on Wednesday, May 12, 2021, in Decatur, Ga. Hundreds of children, ages 12 to 15, received the Pfizer vaccine at the DeKalb Pediatric Center, just days after it was approved for use within their age group. (AP Photo/Ron Harris)
One death, 60 new cases of COVID-19 in Interior Health

The death is connected to the outbreak at Spring Valley long-term care in Kelowna

When a loved one is in need of medical care, no one wants to be on the telephone trying to explain how to find the residence where they are, especially living in a rural area where all driveways look the same. (Barriere First Responders photo)
Is your civic address posted on your property?

If not, how will First Responders find your address if an emergency arises?

Photo by Mikael Kjellstrom, www.pixdesk.ca
Honey bees out and about

Thank you to Mikael Kjellstrom for sharing this amazing photo of an… Continue reading

The TNRD is undertaking a Master Trails Plan for the community of Blue River. (Darcy Lawrey / Pexels Photo)
TNRD to develop trails plan for Blue River

A survey is available for public input on the TNRD website.

(standing head)
Tremendous Tuesday attended by 35 ladies

It wasn’t a Manic Monday - it was a Tremendous Tuesday on… Continue reading

Prince Rupert was one of the first B.C. communities targeted for mass vaccination after a steep rise in infections. Grey area marks community-wide vaccine distribution. (B.C. Centre for Disease Control)
B.C. tracks big drop in COVID-19 infections after vaccination

Prince Rupert, Indigenous communities show improvement

The bodies of Carlo and Erick Fryer were discovered by a local couple walking on a remote forest road in Naramata on May 10. (Submitted)
Kamloops brothers identified as pair found dead near Penticton

The bodies of Carlo and Erick Fryer were discovered by a local couple walking

Municipal governments around B.C. have emergency authority to conduct meetings online, use mail voting and spend reserve funds on operation expenses. (Penticton Western News)
Online council meetings, mail-in voting option to be extended in B.C.

Proposed law makes municipal COVID-19 exceptions permanent

A nurse prepares a dose of the COVID-19 vaccine in Kelowna on Tuesday, March 16. (Phil McLachlan/Black Press)
British Columbians aged 20+ can book for vaccine Saturday, those 18+ on Sunday

‘We are also actively working to to incorporate the ages 12 to 17 into our immunization program’

The AstraZeneca-Oxford University vaccine. (AP/Eranga Jayawardena)
2nd person in B.C. diagnosed with rare blood clotting after AstraZeneca vaccine

The man, in his 40s, is currently receiving care at a hospital in the Fraser Health region

Brian Peach rescues ducklings from a storm drain in Smithers May 12. (Lauren L’Orsa video screen shot)
VIDEO: Smithers neighbours rescue ducklings from storm drain

Momma and babies made it safely back to the creek that runs behind Turner Way

Signage for ICBC, the Insurance Corporation of British Columbia, is shown in Victoria, B.C., on February 6, 2018. THE CANADIAN PRESS/Chad Hipolito
$150 refunds issued to eligible customers following ICBC’s switch to ‘enhanced care’

Savings amassed from the insurance policy change will lead to one-time rebates for close to 4 million customers

Police investigate a fatal 2011 shooting in a strip mall across from Central City Shopping Centre, which was deemed a gang hit. The Mayor’s Gang Task Force zeroed in on ways to reduce gang involvement and activity. (File photo)
COVID-19 could be a cause in public nature of B.C. gang violence: expert

Martin Bouchard says the pandemic has changed people’s routines and they aren’t getting out of their homes often, which could play a role in the brazen nature of shootings

Tinder, an online dating application that allows users to anonymously swipe to like or dislike other’s profiles. (Black Press Media files)
B.C. man granted paternity test to see if Tinder match-up led to a ‘beautiful baby’

The plaintiff is seeking contact with the married woman’s infant who he believes is his child

Most Read