What effects may the Coronavirus have on insurance?

The far-reaching effects of the Novel Coronavirus (2019-nCoV) Coronavirus continue to grow at a rapid rate worldwide, with the World Health Organisation (WHO) recently declaring the Coronavirus “a public health emergency of international concern”.

In addition to the potential health ramifications, the Coronavirus is also having a worrying economic impact globally with many Australians already feeling the impact financially.

A February 24, 2020 Roy Morgan poll found 1 in 6 Australian businesses across all industries, from tourism and accommodation to education and manufacturing have already been financially hit by the virus.[1]

Resilium has had some queries from clients regarding the impact of the virus on insurance and Drue Castanelli, Resilium’s Director of Compliance outlines some of the most likely possible claims to be expected.

Business Interruption

“We have already received a number of enquiries from our SME customers asking if they have insurance coverage for Business Interruption and Travel – (disruptions, cancellations and medical assistance),” says Mr Castanelli.

From a Business Interruption point of view, it’s important to note that policies are usually only responsive to physical damage to an insured’s property.

“Because there is no real physical damage to an insured’s property as a result of the virus, this means that the only cover the insured can rely on is the extension for ‘Infectious or contagious diseases’,” he explains.

Those with insurance need to keep in mind that business interruption cover only comes into the fore when an infectious disease results in ‘closure or evacuation’ of the insured premises.

“While it may be that the coronavirus does result in closure or evacuation of an insured premises, it is still possible that there are other reasons why a claim would not be covered,” says Mr Castanelli.

“It’s important to check your policy and discuss the details with your Insurance Adviser.”


Many countries and governments around the globe, including Australia, have also introduced strict travel restrictions and travel advice relating to travel to and from and through mainland China. This is not only affecting the flow of imports into Australia but also travellers who’ve wanted to change their plans due to the virus.

With regard to cover for medical expenses and cancellation caused by epidemics, coverage will usually apply only if the traveller is already in the region before the insurer issues a travel alert or DFAT raises travel advice to level 4 (“Reconsider Travel” or “Do Not Travel”) as it did on 23 January 2020.

Travel insurance policies include exclusions for pandemics and epidemics which includes viruses such as SARS, Swine Flu, Avian and Ebola. For these exclusions to be relied upon, insurers need to be able to illustrate that the virus fits within the exclusion.

“Those wanting to make a claim will also be asked to provide evidence (such as Department of Affairs & Trade (DFAT), WHO warnings along with medical evidence),” explains Mr Castanelli.


  • Whether an insured is covered depends on the kind of policy they have taken out and the date it was purchased. Some insured people may not be covered for the cancellations of trips for instance. Whether cancellations are covered also relies on when the travel policy cover was taken out. If it was after the Coronavirus was deemed to be a Public Health Emergency, then the chances are high that it will not be covered. Between 20 January 2020 to 24 January 2020, most travel insurers had issued a travel alert which triggered the “travel advice” exclusion.
  • That said, there are some travel insurance policies that may cover insureds who cancel the remainder of their trips if they were already in China before DFAT raised its travel advice to level 4. However, after that date, insurance cover is likely to not be extended due to the exclusion, which is in most, if not all, travel policies.
  • The good news for some travellers is that they may not even need to rely on insurance as there are some airlines offering full refunds for customers who bought and were issued tickets to, from, or via mainland China before the deemed date of knowledge of the Coronavirus. Similarly, some other airlines whose passengers had China as part of their itinerary may be offered a refund.

Medical expenses

  • Some travel policies will cover insureds in an affected region for medical expenses in relation to the Coronavirus so long as they commenced their travels before the DFAT advisory was lifted to level 4 (23 January 2020). This date marks the day the outbreak became a widely known event which in turn means that policies purchased after that date may not be covered.

Contact your local Resilium Adviser for more information

Resilium Advisers are qualified insurance brokers who can present you with a full scope of insurance solutions and explain the benefits of each.

With the expertise of one of our Resilium Advisers, you will have access to a broad range of general insurance solutions that can be tailored for your personal or business needs. We want to make sure you are well covered. Click here to find your local Resilium adviser.


The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Resilium directly.

[1] https://www.roymorgan.com/findings/8298-impact-of-bushfires-coronavirus-february-2020-202002240738