In this monthly email, the Alumni Relations Team is honoured to welcome Associate Professor Suda Wisarutpit, a former full-time faculty member and current adjunct associate professor, specializing in business and commercial laws, to share her knowledge and analysis of a type of business insurance called “business interruption insurance” in relation to the Coronavirus (COVID-19) pandemic. This is presented in two parts, as follows: Part 1 - Information on the growth of COVID-19 insurance and and legal issues that the global insurance business is facing; and Part 2 - Associate Professor Suda Wisarutpit will analyse court judgments on the issue of the scope of coverage of business interruption insurance in the case of the COVID-19 pandemic, to increase understanding and develop a guide to business interruption insurance in Thailand.
The 2019 Coronavirus (COVID-19) pandemic has affected every person in every part of the world, in relation to each person's everyday life and conducting business. Even though the governments of each country have adopted various measures to provide assistance, they do not seem to be sufficient to remedy the damage caused. Those who have taken out insurance to manage the various risks that they face may be trying to determine whether the insurance policy they have covers losses from the COVID-19 pandemic. If you can claim from an insurance company, you may have money to help alleviate the difficulties of everyday life or to support your business for a while longer.
Insurance businesses around the world are also facing the problem of claims from people affected by COVID-19. According to many published sources, since early 2020 insurance businesses around the world have been facing the problem of huge numbers of claims. For example, "... the BBC reports that Lloyd's of London, a British global underwriting company with more than 90 members, revealed that claims relating to the COVID-19 pandemic in the company's first six months amounted to £2,400m, resulting in a loss of £400m down from profits for the first half of the year 2019 of £2,300m. Claims made to the company relating to COVID-19 this year may soar to £5,000m..." it also predicts that "...Lloyd's estimates in early 2020 that the value of claims against global insurance companies from COVID-19 may surpass US$100,000m, mainly from cancelled activities and cancelled travel plans, together with interruption of trading and conducting business as a result of the pandemic. Additionally, there are many businesses that are attempting to claim from insurance companies, but their insurance policies do not directly cover interruption of business due to the spread of a virus, which has resulted in many cases between businesses and insurance companies being brought to court…”[1]
In relation to Thailand, there is information on the growth of COVID-19 insurance and a rise claims, such as this headline from Prachachart Business “... first quarter ‘21 people flock to buy COVID insurance policies, an increase of 1.29 million policies in January alone, an increase of 6%, pushing the total number of policies to 10.66 million, and in Q1 premiums increased by 815 million baht, pushing total premiums to 4.95 billion baht. In the country's COVID second wave, Q1 claims of 93.18 million baht drove up claims across the whole system to 170 million baht..."[2] and “... the insurance association expects the number of people infected with COVID-19 to continue to increase, pointing out that if the total number goes beyond 100,000 cases, this will push the amount of insurance claims to 1,000m, from the current level of 200m, while sales of policies averages 100,000 per day. The association stands ready to negotiate with association hospitals to reduce the price of care in Hospitels...”.[3] However, there is not yet any information about claims for losses from business interruption as a result of the coronavirus (COVID-19) pandemic.[4]
[1] https://www.prachachat.net/world-news/news-523878 dated 19 September 2020 accessed 15 May 2021
[2] tps://www.prachachat.net/breaking-news/news-646311 dated 10 April 2021 accessed 15 May 2021
[3] https://www.bangkokbiznews.com/news/detail/935330 dated 30 April 2021 accessed 15 May 2021
[4] From informal inquiries from officials of the Office of Insurance Commission (OIC), there is still no information on how to claim compensation under the business interruption insurance policies (as of early May 2021)
Thammasat Law Alumni Team
Faculty of Law, Thammasat University
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