In these difficult and troubled times, we hope you and your loved ones are safe and well. At ARB we are fully committed to maintaining service levels and ensuring that the quality of our advice, backed up by superior analytical and actuarial science, continues unabated. In line with this, we intend to issue periodic newsletters to clients and friends and in this first one we focus on the coronavirus which of course is foremost in our thoughts today.

Globally, insurance companies have found themselves in the spotlight relative to Business Interruption coverage issues related to COVID-19. Over the past couple of months, these considerations have become politically charged amid strict lockdowns and travel restrictions that have led to unprecedented levels of unemployment and bankruptcies.

The critical issue for affected Insureds is whether their Business Interruption coverage contains virus-related exclusions. Most policies do, but since mid-March 2020 it has become clear that many Insureds’ lawyers are readying actions against insurance companies related to such exclusions. Regulators and even governments are wading into this highly emotive debate. Even in the UK where Hiscox, among others, were selling Business Interruption coverage prior to the advent of the coronavirus, that provided coverage if a business was forced to shut owing to a ‘notifiable disease’. However, Hiscox have taken a stance that their Business Interruption policies do not specifically cover this COVID-19 pandemic. Class actions are being prepared and there are sure to be huge legal battles in the months and years ahead. Clearly the major beneficiaries will be lawyers!

Potential losses are mind-boggling. In the USA alone the property/casualty insurance industry estimates that economic business interruption losses from the coronavirus, just for small businesses, could be between USD220 to USD383 billion per month! To put this into perspective, the combined capital of the top business insurance underwriters represents only a fraction of the amount that might be expected from coronavirus losses – and that’s from small businesses in the USA only! Elsewhere it has been reported that the loss of revenues from the cancelled Tokyo summer Olympic Games in 2020 will be in the region of USD 75 billion. In Europe the financial hit to the five major football leagues will amount to more than USD 4.3 billion should the uncompleted seasons be cancelled. The list goes on.

Of course there are specially designed Business Interruption policies to cover pandemics plus a number of Event Cancellation policies designed to cover sporting and cultural events that will be legitimately triggered. Only last month there was news of the cancelled Wimbledon lawn tennis championship which resulted in an insurance claim payment of USD 141 million. But such payouts are though relatively rare.

Specifically, in Indonesia, Business Interruption is not a class of insurance that is widely purchased but insurance companies are anxious to clarify their intent not to cover the COVID-19 pandemic or similar viruses for most classes of insurance. As such below is a link for various recently issued Covid-19 Exclusions as designed by the Lloyd’s Market Association (LMA):

You will see that there are different wordings for different classes of insurance that you may wish to incorporate on the policies that you issue or renew going forward.

If you have any issues on the above or on any other item please do not hesitate to contact:

Bernard Krova –
Wayan Sumendra –


To the extent this note expresses any opinion on any aspect of risk, the recipient acknowledges that any such assessment is an expression of PT Asia Reinsurance Brokers Indonesia’s opinion only, and is not a statement of fact. Any decision to rely on any such assessment of risk is entirely the responsibility of the recipient. PT Asia Reinsurance Brokers Indonesia will not in any event be responsible for any losses which may be incurred by any party as a result of any reliance placed on any such opinion.