Insurance companies in Barbados have started to exclude homeowners and motorists from cover for any adverse economic or medical impact arising out of the COVID-19 pandemic.
The Insurance Corporation of Barbados (ICBL) is one of the first companies to introduce a COVID pandemic Communicable Disease Exclusion Clause into the policies of clients with effect from November 1, this year.
But while President of the General Insurance Association of Barbados (GIAB) Randy Graham said on Thursday that the entire industry will eventually adopt the new clause at varying points over the coming year, he is assuring Barbadians that there is no need to worry.
Graham explained that the policy change is the result of a directive from the reinsurers who are seeking to expand the globally accepted definition of infectious diseases to include the ongoing COVID pandemic.
An ICBL memorandum sent to its clients and captioned Communicable Diseases Exclusion Clause read in part “It is hereby understood and agreed that with effect from 1 November, 2021 the insurance by this policy excludes all actual or alleged loss, liability, damage, compensation, injury, sickness, disease [and] death.”
Also excluded from cover will be medical payments, defence costs, [other]costs, expense or any other amount directly or indirectly contributing to by, resulting from or otherwise in connection with a communicable disease or the fear or threat, whether actual or perceived of a communicable disease.
“For the purpose of this exclusion, loss, liability, damage, compensation, injury, sickness, disease, death, medical payment, defence cost, cost, expense or any other amount, includes, but is not limited to any cost to clean-up, detoxify, remove, monitor or test for a communicable disease,” the local insurer informed its customers.
The ICBL however told its clients that all other terms, conditions, exceptions, exclusions and or provisions of their policies remained unchanged.
The GIAB president meanwhile is assuring Barbadians that neither their premiums nor the level of their cover would be adversely affected.
“We are not changing the policy rates because of the pandemic. I don’t think the pandemic will cause any hardships in the form of increased rates or reduction in cover. We don’t see that happening. This change is really just to standardize the definition of infectious diseases to include pandemics, so we don’t see any impact on the regular insurance purchaser or on their policy or premiums,” Graham told Barbados TODAY.
“The reinsurers have given the assurance that the clients in Barbados would hardly notice the change in cover to their policies because there was always an exclusion in the policies for infectious diseases, but what happened with this memo is that it was expanded to include the ongoing COVID-19 pandemic which was not always included in all the terminologies for pandemics,” he further expounded.
The spokesman for the local general insurance sector pointed out that because the definition was being tested all across the globe, reinsurers wanted to be clear that there was a consistent definition for infectious diseases that was being used globally.
“It won’t impact the majority of customers because folks who have their car insurance or their house insurance, they wouldn’t have a claim for infectious diseases…their claim would be for damage from hurricane or accident or something like that. They don’t really have claims in those types of policies for infectious diseases, so it would unlikely have any material impact on folks directly,” the executive insurance official reiterated.
Graham said it’s just a matter of time before the policy adjustment is in place across the entire industry.
“I suspect it may be an issue of timing. Some people may bring it into effect at different points because it is going to come down from their reinsurance companies. Some of the companies have their reinsurance in January, some in April, some in June. So eventually we think all of the insurance companies will get the same directive from the reinsurers,” he stated.
“But whether it will change anything that actually happens in the insurance market in Barbados in terms of whether your car in getting involved in an accident is paid or not paid or whether your house after being involved in a hurricane is repaired or not repaired, I really don’t think it will have any impact at all,” Graham insisted.
emmanueljoseph@barbadostoday.bb
