Over 30 years ago, following the Piper Alpha disaster, in which 167 men lost their lives when the oil production platform exploded, group risk providers quickly alleviated any financial worries for the victims’ families by paying out death claims immediately they were notified, rather than insisting on seeing a death certificate or declaration of presumed death.
The industry has similarly been there for victims of more recent catastrophic events, such as the Manchester bombing and the Grenfell Tower fire, not only bringing speedy financial settlements but also much needed ongoing support and counselling for victims and their families.
Now too, the group risk market is financially secure, models for pandemics, and is working as normally as possible through this pandemic. This in itself is no mean feat but it’s also an incredibly pragmatic, flexible and accommodating market. With the help of their advisers, employers can arrive at solutions that work for their business and circumstances to enable them to make the most of the group risk benefits they have in place and ensure they are getting all the support available to help their people from the embedded services.
First things first, is Covid-19 covered under group risk policies? The majority of people who have Covid-19 are expected to recover but, sadly, some won’t survive. There are generally no exclusions under group risk policies so death benefits under a group life policy should be paid.
However, there may be a restriction in place for travelling against Foreign & Commonwealth Office advice and a catastrophe limit may apply in the event of multiple deaths but, even if it does, it is usually a significant amount – for example
£100 million per policy – and unlikely to be breached. Employers should check their own specific event limit, and whether it will be applied, with their adviser.
For a group income protection claim to be valid, it must meet the terms of the policy which includes the member meeting the definition of incapacity and having been unable to work due to illness or injury for the whole of the deferred period, usually six months.
We don’t yet know enough about the virus to understand whether people will be left with lasting complications or residual damage but, if that transpires to be the case, employees who are unable to work past the deferred period and who meet the definition of disability under the policy should meet the criteria for a valid group income protection claim. However, current logic suggests that most people who have had the virus will have fully recovered before the end of the deferred period that applies under the policy.
Coronavirus is not a specifically covered condition under a group critical illness policy but, again, if the virus were to cause a complication that is a defined condition under the policy, such as kidney failure, liver failure or heart failure for example, generally, that would be covered. For a group critical illness claim to be valid, it must meet the terms of the policy, including the definition for the condition outlined in the policy being satisfied and the pre-existing conditions exclusion not applying to the member.
Another key area of current focus is how furloughed pay or reduced hours impact on group risk benefits. Group risk providers are currently working through this but we’re seeing an increasing number of confirmations that cover can continue at full benefit entitlement rather than based on furloughed or reduced salary level, provided a contract of employment remains in place, data is provided based on full salary and premiums continue to be paid on that basis.
Group risk providers are working through many other issues in order to make things as easy as they can for employers. This includes how to gather the medical evidence required to assess group income protection and critical illness claims without putting undue pressure on the NHS , digital processing, electronic signatures and concessions around premiums, for example, allowing extra time for employers to pay if delays are caused by business interruption or illness.
Employers will find that, in times of greatest need, this market can and does step up the plate. So, it’s business as usual with a healthy serving of understanding and pragmatism.