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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A medical worker prepares vials of the COVID-19 vaccines, Chinese Sinopharm, left, Sputnik V, center, and Pfizer at a vaccine centre, in the Usce shopping mall in Belgrade, Serbia, Thursday, May 6, 2021. Serbian authorities are looking for incentives for people to boost vaccination that has slowed down in recent weeks amid widespread anti-vaccination and conspiracy theories in the Balkan nation. The government has also promised a payment of around 25 euros to everyone who gets vaccinated by the end of May. (AP Photo/Darko Vojinovic)
38 new COVID-19 cases, more than 335k vaccines administered in Interior Health

Interior Health also to start targeted vaccinations in high transmission neighbourhoods

FILE PHOTO
Second doses of COVID-19 vaccine will be available, as AstraZeneca supply runs low: Interior Health

Province expecting large volumes of Pfizer BioNTech as age-based cohort immunization program ramps up

Greg Nesteroff and Eric Brighton, the historians behind popular Facebook page Lost Kootenays, are set to release a book of the same name and have just unveiled its cover showing the ghostly Hotel in Slocan City shortly before its 1953 demolition. Photo courtesy of Greg Nesteroff and Eric Brighton.
Popular historical Facebook page Lost Kootenays set to release book

128-page hard copy documenting history of East and West Kootenays coming this fall

Paul Chung is working as an early childhood educator at Cornerstone Children’s Centre in Nelson. Photo: Bill Metcalfe
Immigration pilot targets hard-to-fill jobs in West Kootenay

Program helps newcomers get permanent residency status in rural areas

Pharmacist Barbara Violo arranges all the empty vials of the Oxford-AstraZeneca COVID-19 vaccines that she has provided to customers at the Junction Chemist which is an independent pharmacy during the COVID-19 pandemic in Toronto, on Monday, April 19, 2021. THE CANADIAN PRESS/Nathan Denette
B.C.’s 1st vaccine-induced blood clot case detected in Interior Health

Interior Health also recorded 52 new cases of COVID-19

(The Canadian Press)
Trudeau won’t say whether Canada supports patent waiver for COVID-19 vaccines

‘Canada is at the table to help find a solution’

A sign indicating face coverings are required by the establishment is pictured on the front door of a business in Vancouver, B.C., Friday, April 9, 2021. COVID-19 cases have been on a steady increase in the province of British Columbia over the past week. THE CANADIAN PRESS/Jonathan Hayward
A sign indicating face coverings are required by the establishment is pictured on the front door of a business in Vancouver, B.C., Friday, April 9, 2021. COVID-19 cases have been on a steady increase in the province of British Columbia over the past week. THE CANADIAN PRESS/Jonathan Hayward
B.C. to start releasing neighbourhood-specific COVID numbers after data leak

Documents obtained by the Vancouver Sun show cases broken down by neighbourhoods

Provincial health officer Dr. Bonnie Henry and Health Minister Adrian Dix update B.C.’s COVID-19 situation at the B.C. legislature, April 29, 2021. (B.C. government)
B.C.’s COVID-19 case count creeps up, seven more deaths

445 people in hospital, 157 in intensive care

Summerland’s positive test rate is much higher than surrounding local health areas, according to internal BC CDC documents. (BC CDC)
Summerland 3rd behind Surrey, Abbotsford in daily per capita COVID-19 cases

Interior Health is rolling out additional vaccine availability to the community

Amazon is pausing its Prime Day marketing event in Canada this year amid ongoing COVID-19 outbreaks at its facilities in Ontario. THE CANADIAN PRESS/Nathan Denette
Amazon Prime Day halted in Canada due to COVID-19 outbreaks in warehouses

The event was postponed to protect the health and safety of employees and customers, the company says

Ally Thomas, 12, seen in an undated family handout photo, died on April 14 from a suspected overdose. Her family says they are frustrated more public supports weren't available when they tried to get her help. THE CANADIAN PRESS
Minister says suspected overdose death of 12-year-old pushing B.C. to ‘do better’

Minister Sheila Malcolmson of Mental Health and Addictions says the government is working ‘as hard as we can’ to build a system of care for youths

At this Highway 3 check point, police officers will be asking for identification from drivers, documentation regarding the driver’s name and address, and the purpose for the driver’s travel. (RCMP)
No fines handed out at 1st COVID-19 roadblock as checks move across B.C.

Cpl. Chris Manseau says a total of 127 vehicles were stopped at a roadblock in the Manning Park area

A spectator looks on as the Olympic Caldron is relit in downtown Vancouver, Wednesday, February 12, 2020. THE CANADIAN PRESS/Jonathan Hayward
Small majority of B.C. residents in favour of a Vancouver 2030 Olympic bid: survey

A new survey shows a split over the possibility of public money being spent to organize and host the winter games

Junior A team Coquitlam Express is offering all Tri-City residents who get vaccinated against COVID-19 a free ticket to one of their games. (Facebook/Coquitlam Express)
B.C. hockey team offering free tickets to hometown fans who get the COVID-19 vaccine

‘We know the only way to get fans back is people getting vaccinated,’ says Express’ general manager Tali Campbell

Most Read