Continuity clause in group insurance
The continuity clause credits waiting periods and prior cover already completed by insured employees when a group policy moves to a new insurer.
- Clause type
- Condition
- Origin/Market
- DACH – statutory
- Favours
- Insured
- Negotiability
- Negotiable
Purpose
When a company moves its group cover, for example daily sickness benefits or group life insurance, to a new insurer, individual employees could otherwise face setbacks: new waiting periods, a renewed exclusion of pre-existing conditions, or the loss of accrued rights. The continuity clause ensures that the new insurer credits the time already served and rights already acquired with the previous insurer.
Effect and limits
As a rule, waiting periods already completed are credited in full, so no new waiting period begins for existing employees. Claims already in payment are usually either completed by the outgoing insurer or seamlessly continued by the incoming insurer, depending on how the agreement is structured. New employees generally do not benefit from the clause, since they have no prior period of cover to credit. Credit is also usually limited to the level of cover in force at the time of the switch; any increase in benefits around the same time is typically subject to fresh waiting periods.
Negotiation and practice
When switching insurers as part of a tender, the continuity clause is a key negotiating point, particularly for a workforce with above-average sickness absence or an older employee base. Employers should obtain written confirmation of the exact crediting terms and fully disclose ongoing claims to the new insurer before the switch date, to avoid later disputes over responsibility.
The continuity clause has no statutory basis in any of the three DACH jurisdictions; it is individually negotiated between employer and insurer or broker and forms part of the relevant group policy.