Blog question – Does COVID-19 create a force majeure situation?
This question was asked of me over the weekend and before I put down my own thoughts, I did a quick search and found a great article by Paul Venus and Scott Alden, from Holding Redlich, that covers the issue extremely well.
Rather than reinvent the wheel, I simply attach a link to their quality analysis. Thank you gentlemen, well done!
https://www.holdingredlich.com/force-majeure-and-covid-19-what-you-need-to-know-now
What I would add is, that more and more service contracts do away with force majeure and make one party liable for contractual fines and penalties for non-delivery. As such, contractual fines and penalty coverage is available as an extension of coverage under the Industrial Special Risks (“ISR”) and quality business pack policies.
Having said this, it is cold comfort for a client that is not able to claim, as the trigger still needs to be an insured peril.
Thanks Ian [surname and email provided] for your question.
will be interesting to see if this reason is allowed as frustration for covid 19 style pandemics going forward as one might now assume it is reasonable to expect this going forward in a contract and hence it wont become part of th frustration clause
a supervening event that was contemplated by the parties, even if the parties fail to anticipate the severity.[5]