11 Feb Epidemic Business Insurance Warning
Epidemic Business Insurance Warning
The global threat of coronavirus should lead firms to check whether their business insurance cover provides adequate protection against the possibility of an outbreak, according to a report in the Financial Times.
The coronavirus infection outbreak, which began in China, has now spread to Asia, the Americas and Europe, with three confirmed cases in the United Kingdom so far.
Against this background and with little known about the potential impact of the epidemic, now is the time for firms to ensure that their business insurance policies will provide sufficient cover in the event the outbreak leads them to suffer business interruption or any other form of financial loss.
The Financial Times article said that it was worth checking the small print on business insurance policies as although many will pay out, a significant number contain clauses that include deliberate exclusions for losses sustained as a result of epidemics and pandemics.
Insurance experts have warned that the outbreak has already affected companies with manufacturing in the key regions of China, but it is not only those businesses with ties to Chinese manufacturing who might lose revenue; there is concern that businesses in the travel and tourism sector – for example hotels, motels, leisure providers, restaurants and bars – might suffer losses caused by a reduction in travel levels during the period of the coronavirus outbreak.
The business insurance industry has been heavily involved in the response to the coronavirus outbreak in China. For example, Allianz announced an RMB 4 million (£442,000) emergency response fund for medical supplies and emergency insurance protection. Furthermore, two of Allianz’s subsidiaries in China, Allianz China Life Insurance and Allianz Jingdong General Insurance have also announced investment in the recovery and protection effort.