Insurance cover for business disruptions due to COVID-19 (coronavirus) – frequently asked questions

Can I take out export risk insurance retroactively?

SERV insurance policies can only be taken out before the occurrence of an insurable risk. Risks that have already occurred at the time of issuance of the insurance policy cannot be insured.

Are existing policies being affected by the current crisis?

Existing insurance cover is not affected (voided or restricted) by the COVID-19 crisis. However, the circumstances may give rise to a risk aggravating factor, in which case SERV’s consent would be required in order to continue producing or supplying under your export contract.

Are the effects of COVID-19 covered by pre-shipment risk insurance?

Pre-shipment risk insurance primarily serves to protect you against the financial consequences of a production stoppage. If it becomes impossible, or even unreasonable, for you to continue producing or shipping goods due to a breach of contractual obligation by a customer (for example, if the customer terminates the contract because of COVID-19 or refuses to accept any more goods), your production costs are covered in principle. You would also be insured if a foreign customer does not pay the production costs that it owes you upon termination of the export contract. We recommend checking the conditions in your export contract relating to termination by the customer in the event of force majeure and the corresponding legal consequences; if the customer is contractually entitled to terminate the export contract without owing compensation, this would not constitute an insured (commercial) risk.

Are the effects of COVID-19 covered as a political risk or force majeure under a pre-shipment risk insurance policy?

If a claim does not constitute an insured commercial risk (see previous question and answer), you may be covered directly for political risk or force majeure in certain cases: force majeure events outside of Switzerland are coinsured by SERV if they cannot be insured on the private market. Epidemics/pandemics are also classed as force majeure. Extraordinary government measures to curb the effects of COVID-19 may fall under the category of political risk. These risks are covered if they were not foreseeable when the insurance was taken out and if they are the direct cause of the impossibility/unreasonableness to continue producing/supplying or of the non-payment of agreed costs.

What are my obligations if I notice that the effects of COVID-19 might interrupt production or if I have doubts about my foreign customer honouring the contract as a result of COVID-19?

You should first try to find an amicable solution with your customer, if necessary by changing your contractual supply/performance obligations. It is important that you inform us immediately of any delays in supply/performance as SERV must agree to such changes and amend the policy accordingly.

Are the effects of COVID-19 covered by supplier credit insurance?

Supplier credit insurance protects you against a foreign customer not meeting its payment obligations towards you. However, the receivable must actually exist: the existence, due date and validity of the insured receivable must always be proven in the event of a claim. Whether your foreign customer is still obliged to pay despite the COVID-19 crisis – and, thus, whether the receivable actually exists – would depend on the export contracts that you have agreed with one another. If the receivable exists and the payment default is due to the foreign customer’s insolvency or unwillingness to pay, this constitutes an insured del credere risk. This also applies if the customer’s insolvency is the result of a pandemic.

Are the effects of COVID-19 covered as a political risk or force majeure under a supplier credit insurance policy?

If a claim does not constitute an insured commercial risk (see previous question and answer), you may be covered directly for political risk or force majeure in certain cases: force majeure events outside of Switzerland are co-insured by SERV if they cannot be insured on the private market. Epidemics/pandemics are also classed as force majeure. Extraordinary government measures to curb the effects of COVID-19 may fall under the category of political risk. These risks are covered if they were not foreseeable when the insurance was taken out and if they are the direct cause of the foreign customer’s inability to meet an existing payment obligation.

As a lending bank, are we covered if the borrower is unable to repay a loan as a result of COVID-19?

A pandemic may be a valid reason for why a borrower is unable or unwilling to repay a loan. However, the cause of the borrower’s insolvency or unwillingness to pay is not relevant for insurance provided by SERV.