Article Post on 26 March 2020

FAQ Insurance in the Grand-Duchy of Luxembourg - COVID-19

This FAQ page also exists in French, German, Italian and Luxembourgish

_Government package for the Luxembourg insurance sector

The Luxembourg Government, through Grand-Ducal Regulation of 18 March 2020 introducing a series of measures in the context of the fight against COVID-19, has classified the insurance sector as a core activity for the preservation of the vital interests of the population and country, considering the pandemic which currently spreads throughout the Grand-Duchy.

Consequently, any individual is permitted to leave their confinement place and travel, in urgent situations, to the insurance institutions.
More information (in French)

The national supervisory authority of insurance and reinsurance undertakings, Commissariat aux Assurances (CAA), continues to fulfil its role as a supervisory authority and will operate with reduced staff until further notice. CAA has stated that 'considering the exceptional circumstances resulting from COVID-19, time limits set forth in respect of the procedure for extrajudicial settlement under CAA Regulation N° 19/03 of 26 February 2019 relating to the extrajudicial settlement of disputes, cannot be met anymore and until the situation returns to normal conditions'.
More information (in French)

All insurance-related administrations continue to fulfil their role and services. The representative association of the insurance and reinsurance sector, Association des compagnies d’assurance (ACA) has communicated that 'within the context of the measures designed to stem the spread of the COVID-19 virus, Luxembourg insurers specify that all their customer services are maintained, but that clients are not assisted physically; neither in the Headquarters nor in the agencies. Insurers (who are members of ACA) ask their clients to use communication via email, telephone, SMS or computer platforms ☎️ 💻'.
More information

Wildgen


In the crisis we are currently experiencing, certain issues arousing in insurance matters: Which policies will cover COVID-19 risk? What are the most frequently asked questions for companies and individuals? What can one do for payment of premium, notification of a claim or settlement of a claim?

Your insurer continues to provide services and carry out its functions and remains available.

The COVID-19 pandemic has no inherent implications on the correct operation of the different insurance policies of a company or individual. Each policy can apply to any insured loss relating to a risk covering COVID-19. However, the exceptional circumstances surrounding COVID-19 may have an impact on many insurance policies.

Challenges for companies:

In a situation of teleworking (home office), what are the consequences for the insurance policy?
 

Companies have a duty to guarantee security and health of their staff in all aspects of their work, by that they may, in the current situation of the COVID-19 pandemic, impose teleworking on their employees. In order to organise home office work as an alternative to the standard working conditions due to the circumstances, the company and its employees shall enter into an addendum to the employment contract or any other agreement justifying the recourse to teleworking (home office) on the objective grounds of safety precautions taken by the employer as part of the fight against COVID-19.

The company should also notify this change of event to its insurer, due to the fact that it is not an ordinary working condition to exercise its professional activities, and to avoid that the insurer considers the home office option as a cause of exclusion of professional warranty. 

Companies shall therefore check appropriate insurance cover of: 

  • on the one hand, work performed under home office arrangement, and
  • on the other hand, equipment supplied for such purposes in respect of loss, deterioration and damage insurance. As the case may be, the company shall also check that the insurance policy extends to the border region for cross-border commuters.
Can a workplace accident happen, during teleworking (home office)?
 

This raises the issue of  the actual cover for accident at work in view of the change made to the normal working conditions under the employment agreement. Indeed, a workplace accident is defined as 'the accident occurring by the fact of performing work or on the occasion thereof'; it is therefore crucial to define the terms and conditions of the teleworking (home office) arrangement and notably the relevant working hours.

In a situation of casual teleworking, the national accident insurance association, Association Assurance Accident (AAA), requires a written agreement between parties and will review the circumstances of occurrence of the accident.

Teleworking is not stated under the heading 'regular workstation or workplace' but shall be considered as 'casual or mobile workstation or workplace' being defined as follows: 'a temporary assignment to a fixed but different workstation or in a local unit that differs from the regular unit, which includes workstations that are occupied during several days or weeks but do not constitute a workstation assigned on a permanent basis (temporary assignment of an employee of a company working in the premises of another company or hired by a placement office, substantial maintenance activities at a client’s place, teleworking, etc.)'.

Furthermore, for each home office arrangement for a cross-border commuter, the national social security body, Centre Commun de la Sécurité Sociale (CCSS), shall be notified through Form A1 (in French) (source AAA.lu 'Instructions regarding declarations of an accident at work / commuting accident - Notice').

Download forms (in French)

In a situation of teleworking (home office) of directors and officers, should the insurer be notified?
 

Directors and Officers Liability Insurance (D&O) mainly covers pure economic losses resulting from breaches of their obligations and duties. The policyholder is the company and the coverage insures individuals in their capacity as directors or officers, for their liability for damages caused by a breach of their duty of care.

Insured persons are the members of the top management of a company, i.e. the members of the board of directors, board of managers, executive committee, division or group management, as well as internal control organs.

This policy covers insured persons against expenses of judiciary and extrajudicial defense against unjustified actions. It also indemnifies expenses arising from justified claims, such as  punitive damages or lawyers’ fees. The policy can also cover the private assets of the insured person.

The situation of teleworking (home office) may not be foreseen under the policy, since it is not the regular working conditions, thereby an uncertainty remains.

Therefore, to the same extent as in the situation of teleworking (home office) due to COVID-19, it is advisable to notify the D&O insurer of the changes to the working conditions of directors and officers.

Is COVID-19 a trigger event for 'Business Interruption / Loss of Profit Insurance'?
 

A 'Loss of Profit coverage', following a business interruption due to COVID-19, is neither possible nor insurable.

'Business Interruption insurance policies' cover damages defined in the insurance contract. COVID-19 is not a risk covered by such policies so that the consequences thereof on the business activity of companies are not covered under such policies either.

The insured will however be indemnified if your insurance policy covers pandemic risks on an exceptional basis. By way of example, it is indeed possible to subscribe an extended cover for damages caused by a failure in the supply chain. Nevertheless, such failure shall generally be related to an insured event and a case-by-case analysis is necessary to assess whether COVID-19 may fall into the scope of such insured events.

How should car insurance claims be notified?

Insurance companies remain operational, therefore claims may still be notified in the usual manner. However, in the event of a road accident, and considering that car dealerships and repairers are subject to reduced activity following government measures, the situation shall be checked on a case-by-case assessment. Even if such professionals continue to accept new work, it is important for clients to get formal confirmation that such repairs will be made within the agreed deadline. It is advisable, for damages that do not immobilize the vehicle, to postpone any appointments until the situation returns to normal conditions.

In case of a claim, the insurer shall be notified as soon as possible. Insurance companies may be reached by email or through their dedicated websites or applications.  

Is it still possible to subscribe for a new car/goods policy?

COVID-19 does not change the situation but may have consequences on the conditions of entering into the policy. By way of example for a car insurance, regardless of the age of the vehicle, an information form and pictures of the car may be requested or accepted, depending on the practices of each insurer. Nevertheless, headquarters of insurers are closed to the public, but continue to provide client services by phone, email or any digital means. 

The National Vehicle Testing Centre, Société Nationale de Contrôle Technique (SNCT) websites are also available and allow clients to print insurance certificates to access technical control facilities, using the policy number of the concerned vehicle. In most of the cases, however delivery of a car insurance, so called ‘green card’ (proof of currently valid insurance), will not be possible given the current circumstances. 
 

 Other damages in direct relation to COVID-19
 
  • Does my ‘Event cancellation insurance’ covers damages arising out of the government measures taken against COVID-19? 
    Special insurance policies for cancellation of cultural and sport events insure risks that are external to the organisers. Consequently the decision to cancel such events taken by organisers out of any public authority decision will not be indemnified by the insurer. On the contrary, subject to the terms and conditions of the policy such as the definition of insured risks and/or exclusion clauses, financial losses may be indemnified under the policy in the event of a cancellation imposed on an organiser by decisions adopted by the government or public authorities.
    Considering the condition of hazard inherent to any insurance policy, only policies subscribed before the qualification of COVID-19 as a pandemic may be called for indemnifying losses resulting therefrom.
  • Are third-party liability insurance policies impacted by COVID-19? Standard professional liability insurance policies cover civil liability towards third parties (other than the employees) in the event of damages arising from business activities. Fault claims that third parties may raise against a company may be covered accordingly. 
    Regarding staff member of the company, standard liability insurance may on the basis of the liability regime, be triggered if the civil liability of the employer has been sought. 
    In all cases, the policy can only be called subject to those coverage conditions and exclusion clauses set in the policy. 

Challenges for individuals:

Has teleworking (home office) any impact on home insurance?


Given that the residence is generally insured exclusively as a private residence, this qualification may be impacted and treated as a workplace if the owner or occupant of the residence does teleworking (home office). In that respect, it is advised to notify this temporary situation to your insurer. 

Is COVID-19 a covered health condition?
 
  • The situation under health insurance programmes
    Complementary health insurance contracts cover health expenses incurred by the insured affected by COVID-19, up to the usual level of guarantee purchased. It mainly relates to medical consultations, hospital expenses, drugs and laboratory tests.
    Unless otherwise stated in the insurance policy, expenses not reimbursed by the compulsory health insurance scheme (such as masks and hydro-alcoholic gels) are not covered by supplemental health insurance contracts.
    Some insurance products provide a daily allowance to persons unable to work due to illness or accident, which may be triggered for a medically certified leave relating to COVID-19. Quarantine will be covered only if there is a medical certificate attesting a health condition due to COVID-19. Other terms and conditions of the policy, such as the qualifying period (waiting period) will continue to apply.
  • The situation under welfare policies
    For persons who are positive with COVID-19 symptoms and in a medically certified leave, welfare policy benefits will apply according to their terms, i.e. up to the level of coverage purchased and after expiry of the relevant qualifying period set forth in the policy. The same rules will apply to the death benefits under such policies.
    As far as the conditions for calling the ‘sick leave’ benefits are concerned, the insured may be covered or not, depending on the circumstances. If the insured does not hold any medical certificate attesting a health condition due to COVID-19, the terms and conditions of the welfare policy shall be carefully analyzed to assess whether the coverage extends e.g. to mandatory confinements with work exemption. 
May I continue to subscribe for policies?

Most insurers continue to provide client services, as the government classified the insurance sector among the essential activities for the preservation of the vital interests of the population and the country. Even if the headquarters of insurers are closed to the public, they remain available by phone, email or any digital means. 

 How can I notify a car insurance claim?

In case of a road accident, and considering that car dealerships and repairers are subject to reduced activity following government measures, the situation shall be checked on a case-by-case assessment. Even if such professionals continue to accept new work, it is important for clients to get formal confirmation that such repairs will be made within the agreed deadline. It is advisable, for damages that do not immobilise the vehicle, to postpone any appointments until the situation returns to normal conditions. 

In case of a claim, the insurer shall be notified as soon as possible. Insurance companies may be reached by email or through their dedicated websites or applications. 

 Is COVID-19 covered if my travel plans get cancelled?
 
  • Can I still subscribe travel cancellation insurance coverage since COVID-19 pandemic?
    Applications for travel cancellation insurance prior to 1 May 2020 are no longer accepted. Insurers shall be contacted if you intend to terminate any trip cancellation policies already booked for the year 2020.
     
  • What is covered by travel cancellation insurance? There is no single definition of the scope of trip cancellation insurance, thereby the terms and conditions of each policy shall be considered and analysed separately. In general, cancellation policies will cover events of unforeseen illness, accident or injury of the insured person. COVID-19 shall clearly fall into that scope and allow the insured being medically declared as positive to COVID-19 to claim such benefits. 
     
  • Does COVID-19 allow me to cancel my travel plans and be reimbursed?
    Such coverage usually does not extend to delays, deficiencies and other impediments within the performance of the services whenever they are not attributable to the insurer or they are the consequences of a situation of force majeure. COVID-19 may be qualified as a case of force majeure therefore the insurer would not be obliged to indemnify such situation.


For access to more information, please contact our dedicated Insurance Team: Karine Vilret, Silvia Bracaloni, Nicolas Melmer or at covid19@wildgen.lu.

 

DISCLAIMER: This document is provided for general information purposes to clients and contacts of WILDGEN S.A. It includes a general legal overview but does not purport to consider factual matters, business opportunity issues or accounting matters. This general information cannot be construed and shall not be used as a formal legal advice. Due to the dynamic and evolving nature of infectious diseases, we cannot represent that this information is constantly up-to-date at any given time. It is your responsibility to monitor and seek confirmation of the current situation on a regular basis regarding the developments of COVID-19 pandemic.

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