Coronavirus and business interruption: hotels, restaurants, is there a loophole in your insurance policy? (Free translated synthesis)

Article de Jade Grandin de l’Eprevier paru dans L’Opinion

Insurance companies are insuring that business losses related to the pandemic are not insurable. However, the contracts are ambiguous, particularly concerning coverage during administrative closures, and the article proposes the contracts of five French insurance companies.


A Crédit Mutuel contract offers cover during administrative closures, except when it concerns a micro-organism. Crédit Mutuel uses this exclusion to justify not compensating its customers. However, “this clause would be inapplicable, as it concerns real estate damage” as opposed to material damage such as operating loss according to Jérôme Goy. However, Crédit Mutuel explains that this clause appears in the article “general exclusions” and covers all damage, including material damage. But then, “its scope would be quite broad” comments Jérôme Goy. “If the exclusion amounts to annihilating 80 % of the guarantees, the judge will consider it null and void”.


Crédit Agricole‘s contract clearly excludes compensation for business interruption in the event of a pandemic. The contract only guarantees the perils listed in the contract, which is not the case in the event of a pandemic. On the other hand, in terms of general exclusions, it is stated that operating losses resulting from a ban on access linked to a contagious disease are not covered.


Axa‘s most widely distributed generic contract states that the business interruption coverage works during an administrative shutdown following a pandemic. But the guarantee does not work if another establishment is administratively closed for an identical cause in the same department. “Can we imagine an epidemic in which only one establishment would be closed? “wonders Jérôme Goy. In insurance law, an exclusion is necessarily limited. “There, it seems to be unlimited since it would concern all cases of epidemic, and therefore it could be null and void”.


As the provisions of the Covéa contracts were not clear, the insurance company decided to pay compensation to the companies concerned for fear of losing a possible lawsuit.


Generali France‘s generic contract for artisanal traders operates “at peril” as for Crédit Agricole and offers a guarantee only in the event of food poisoning, which does not allow compensation for the pandemic.

All these examples illustrate the principle of “sedimentation” that characterizes insurance contracts, analyzes Me Goy. “Clauses are often added one after the other over the years, either to add a newly emerged risk or to exclude it. But the coherence between all the clauses can sometimes be lost along the way, so that some of them contradict each other, and clauses with a past example as a reference may not apply well to future events, which are always different”.