Coronavirus outbreak: travel insurance & business insurance.

I have been fielding a lot of questions this week since the outbreak of Coronavirus from brokers and or insureds planning to travel to China over the next few months. I therefore start with Travel Insurance.

Travel Insurance

Like so many questions in general insurance I cannot provide a detailed answer without reading the individual policy.

As a generalisation but I stress, please read the actual wording, some policies, particularly quality Corporate Travel policies provide coverage if it was taken out before the outbreak started while many Leisure Travel policies have an exclusion for pandemics.

Naturally, now that the outbreak is known, it is unlikely any insurer will provide the coverage moving forward as insurance is there for the unexpected not the certain.

If you have travel dates into the future, you will no doubt be watching the situation and will make a decision on whether you ought to travel to a country with the outbreak based on the information available and your own risk appetite.

Business Insurance

With many businesses the outbreak has created an issue. Particularly schools, kindergartens, child care centres, places of worship etc.

For my part, I support the decision of many schools to ask students who have recently returned from the region not to attend school for 14 clear days. At LMI we have two staff in this boat and we have arranged for them to work from home as a precaution which both staff members fully support.

With Business Interruption, since the outbreak of SARS in 2003 all the business policies I can think of have an exclusion along the lines of:

Loss as insured by the policy resulting from interruption of or interference with the Business directly or indirectly arising from:

the outbreak of a notifiable human infectious or contagious disease occurring within 40 kilometres of the Premises;

Most exclusions in fact name the major pandemic diseases that are excluded, but have a catch all for new threats by stating that any notifiable disease under the Quarantine Act 1908 is excluded.

At the time of writing I understand that the disease is a notifiable disease in NSW and possibly WA. I am not sure under what legislation they are requiring this notification. As the virus is similar to SARS and has caused over 100 deaths in China, if it is not already notifiable by the Federal Government under the Quarantine Act, I suspect it will be shortly.

For this reason, I would urge business to take reasonable precautions so as the financial impact including business interruption losses are kept to a minimum.

Already we have seen a rush on masks while experts state that some cheap masks do not offer adequate protection

There is a government website where information on the virus is available. Please click here.

No doubt there is a great effort in the medical research area for an effective treatment in many countries around the world including Australia. Clearly it is not a time to panic but a time to take reasonable precautions to protect staff, customers and ourselves which in turn protects our organisation, while of course staying vigilant and informed.

7th February 2020. Please see this link for an important update.