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

Spallumcheen councillors (from left) Todd York, Gerry Popoff, Christine LeMaire, John Bakker, Joe Van Tienhoven and Andrew Casson join Mayor Christine Fraser (fourth from left) in helping to proclaim the township open for business with new signage off Highway 97A. (Township of Spallumcheen photo)
Being open for business paying dividends for Spallumcheen

Township wins provincial award, new business and building starts increase

Salmon Arm Silverbacks forward Mathieu Bourgault (13) tries unsuccessfully to deflect past West Kelowna goalie Johnny Derrick during the Warriors’ come-from-behind 7-6 BC Hockey Leaguje pod shootout victory Saturday, May 8, at Vernon’s Kal Tire Place. (Tami Quan Photography)
West Kelowna Warriors rally to edge Salmon Arm in shootout

Warriors overcome three significant deficits to post 7-6 BCHL pod win in Vernon; Silverbacks finish pod 9-7-2-2

John Pavelich’s 83rd birthday had an added surprise; members of Enderby City Council came by his residence to present him with a Lifetime Civic Merit award Saturday, May 8, 2021. (Contributed)
Enderby resident unwraps Lifetime Civic Merit award on 83rd birthday

John ‘JP’ Pavelich has been a pillar of volunteerism in Enderby since 1967

The Salmon Arm Pickleball Club would like to store its locker containing a defibrillator and a few other items at the pickleball courts in Klahani Park. (Photo contributed)
Talk of ‘new day’ follows pickleball club request for locker at Salmon Arm park

Council voices varying opinions about locker for defibrillator but agrees to get rec society’s view

Nuns of Mother Teresa’s Missionaries of Charity, carry some of her relics during a vigil of prayer in preparation for the canonization of Mother Teresa in the St. John in Latheran Basilica at the Vatican, Friday, Sept. 2, 2016. In which city did she do much of her charitable work? (AP Photo/Gregorio Borgia)
QUIZ: How much do you know about these motherhood issues?

In honour of Mother’s Day, take this 10-question quiz

(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’

The Oliver Fire Department had to put out a fire on their own training ground, and it wasn’t one they set. (Facebook)
Vehicles torched at Oliver Fire Department training grounds

This suspected arson comes after the cars were vandalized earlier and suspicious fire the night before

Tavis Stevenson, son of Pam and Bruce Stevenson, founders of The Book Shop on Main St, is the creator of the whimsical animal farm carts seen above The Book Shop. He also painted the book mural in the back alley behind the shop. (Monique Tamminga Western News)
The Book Shop in downtown Penticton is one of those rare gems

The Book Shop, like so many businesses, is wanting to turn the page to the end of this pandemic

Pieces of nephrite jade are shown at a mine site in northwestern B.C. in July 2019. THE CANADIAN PRESS/HO-Tahltan Central Government MANDATORY CREDIT
Indigenous nation opposes jade mining in northwestern B.C.

B.C.’s Mines Act requires operators to prepare a plan to protect cultural heritage resources

The body of Brenda Ware, 35, was found along Highway 93 in Kootenay National Park on Thursday, May 6, 2021. (RCMP handout)
RCMP ask for tips after woman’s body found in Kootenay National Park

Brenda Ware was found along Highway 93 in the park, 54 kilometres north of the town of Radium

People pass the red hearts on the COVID-19 Memorial Wall mourning those who have died, opposite the Houses of Parliament on the Embankment in London, Wednesday, April 7, 2021. On May 3, the British government announced that only one person had died of COVID-19 in the previous 24 hours. THE CANADIAN PRESS/AP-Kirsty Wigglesworth
For a view of a COVID-19 future, Canadians should look across the pond

Britain, like Canada, is one of the only countries in the world to delay second doses for several months

Edmonton Oilers’ Connor McDavid (97) celebrates his 100th point this season with Leon Draisaitl (29) against the Vancouver Canucks during second period NHL action in Edmonton on Saturday, May 8, 2021.THE CANADIAN PRESS/Jason Franson
Edmonton superstar McDavid hits 100-point mark as Oilers edge Canucks 4-3

NHL scoring leader needs just 53 games to reach century mark

Most Read