Has the official regulator/authority intervened to help resolve contractual uncertainty around the validity of BI claims?


Before the COVID-19 outbreak, BI Insurance was rarely purchased by Chinese enterprises. It was an addition to Enterprise Property Insurance, which only comprised 3.6% of the entire property insurance market in 2019 according to the China Banking and Insurance Regulatory Commission ("CBIRC"). BI Insurance as an additional insurance has therefore been insignificant in mainland China insurance market. As a result BI claims by Chinese enterprises are rarely seen.

However, things have changed dramatically from the very beginning of COVID-19 outbreak in mainland China. In order to help enterprises in difficulty due to COVID-19 and administrative lockdown measures, CBIRC intervened by issuing several notices independently or jointly with other departments from late January to early February 2020. These notices instruct insurance companies to deal with claims arising from or relating to the COVID-19 outbreak with priority, to expand the coverage of insurance policies to a proper extent, and to pay all the eligible claims promptly.

CBIRC has also directed insurance companies to launch more types of BI Insurance policies to cover local enterprises against losses due to BI caused by COVID-19 and related administrative measures. Insurance companies have also, based on BI Insurance and under the instruction and supervision of CBIRC and governments, designed and launched a new insurance policy specifically for BI risk during COVID-19, namely Return-To-Work ("RTW") Insurance. To make these insurances affordable, local governments including Hainan province, Shanghai, Ningbo, etc. may also provide subsidies to qualified enterprises (eligibility varies in different area).

Do insurance policies in your jurisdiction generally restrict BI to losses directly resulting from physical damage?

Formerly yes but currently no.

In mainland China, BI Insurance before COVID-19 generally covered the profit losses incurred during the business interruption caused by physical damage of property resulting from natural disasters or accidents. BI due to epidemics or administrative orders was usually excluded, subject to each policy's terms.

In contrast, BI Insurance and RTW Insurance after COVID-19 has become more flexible and no longer requires physical damage. To save enterprises in trouble due to COVID-19, BI Insurance provides compensation for product losses, employee remuneration and quarantine costs. RTW Insurance aims to provide safe resumption of production and may contain an option to combine compensation for profit losses of enterprises during BI and for death or disability of employees due to COVID-19. Another feature of BI Insurance and RTW Insurance after COVID-19 is that the amount of compensation is generally fixed, rather than connected with actual losses suffered.

Are there any court proceedings currently dealing with the validity of BI claims?


Pending court proceedings are not always available to the public in mainland China. As far as we are aware, as of November 4, 2020, there are no court proceeding dealing with the validity of BI claims known to public. 

Have any judgments been given that deal with BI claims in relation to the current COVID-19 pandemic or other contagious/infectious diseases?

No. See answer to previous question.  

Name of regulator, websites and articles of interest