Wednesday, 10 March 2021

​Insurance claims during COVID-19

 COVID-19 outbreak has created panic and fear globally and in India. The way the crisis will run from here cannot be known but alongside the tragic human toll, it has have considerable economic impacts, posing major challenges to the global supply chain and certain business sectors such as airlines, travel, and leisure.

A crisis such as Covid-19 affects all business sectors  - but it especially puts a spotlight on insurers who can expect to be inundated with general inquiries and claims across different lines, whether that be for health, life, or non-life cover. People have been inquiring about whether their insurance policy provides coverage for the infectious disease and about COVID-19 specific insurance cover.

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Seeing the rapid spread and anxiety among customers, many insurance firms have notified about their products providing coronavirus cover on the websites and issued statements to reduce panic. However, there is uncertainty among the people who have already purchased health or corporate insurance about their policies covering novel Coronavirus. There have also been cases where the insurance companies have denied claims to the insurers affected by Coronavirus, thus, making others curious about whether their policy would cover the disease or not and what are their options if they are denied the claim.


Insurance claims and challenges faced by the insurers

While several insurance policies covering COVID-19 have been recently launched, it’s important to understand their claim parameters. There may be cases where the claim may be rejected due to one of the many reasons. Let us have a look at some of the insurance claims and the possible challenges that can be faced by the insurer with the same.

Consult: Top Insurance Lawyers in India


Corporate Insurance

Corporations in the country take insurance to cover loss of profit. The same has two categories- material damage policy and business interruption. The former could be enforced when there is a loss due to unforeseen inevitable accidents like fire or flood. It is usually specified while adopting the policy. Business interruption could be claimed only when there is a loss due to material damage.

Ideally, whether or not insurance can be claimed largely depends on specificity of the terms of the insurance. Use of general terms like unforeseeable events makes the scope of claiming insurance premium very large. Most of the firms have their employees working from home. Despite that, productivity could not be as much as it is in the normal course of operations.

Many businesses are going to suffer losses in the foreseeable future. For the same, there are going to be several insurance claims. Insurance companies may not go about indemnifying every firm for its loss.

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Employees’ State Insurance

Industrial workers are entitled to Employees’ State Insurance (ESI) as a part of a scheme by Employees’ State Insurance Corporation (ESIC). The pandemic has had a tremendously adverse effect on the world economy. India is facing an economic crisis as well.

The fall of an economy is directly proportional to the increase in unemployment. When an industrial worker loses his/her job without their fault, they are entitled to the unemployment cash benefit policy of the ESI. Ongoing market conditions give a hint of potential unemployment in the industrial sector.

ESI is an autonomous corporation that was established by the Ministry of Labour and Employment in India. Though it was set up for employee benefit, there are still chances of certain employees not receiving their rightful benefit. In lieu of the same, there are going to be controversial claims which might require legal representation.

Consult: Top Insurance Lawyers in India


Health Insurance

Persons who have been diagnosed with COVID-19 will claim expenses of their hospitalization from the mediclaim policy of their insurance company. The ones who have health insurance would claim the entire expense of their insurance company.

Very often, these insurances cover specific pre-stated diseases. The novel coronavirus is not covered under the policies of insurance companies unless there is a general term that is inclusive of viruses or life-endangering diseases. With the current rate of increase in the number of patients, insurance companies may attempt to evade insurance claims. Therefore, thorough interpretation is the only means of recovering insurance from companies.


What to do if you are denied your insurance claim?

Whether a claim can stand or not would depend upon the clauses mentioned in the insurance policy. In case a claim has been denied to an insurer, he/she can file a case with the help of a lawyer against the insurance company for the wrongful denial of the claim. However, whether the claim will be approved or denied by the court would depend upon the interpretation of the specific clauses.

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How can a lawyer help you?

Looking at the complexity of the situation, it is necessary that you have an expert by your side while going against the insurance company to redeem your insurance claim. An insurance lawyer is an expert in handling cases related to insurance claims and owing to his/her years of experience can guide you with the best possible strategy to recover your insurance. He/she can represent your case before the court and can help you find the best possible solution for your legal problem.

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