10/03/2020
Coronavirus (COVID-19) Insurance Guidance
The spread of the Coronavirus is fast-moving and is causing disruption to personal and business travel plans, product supply chains, staffing levels and general business footfall.
Here at One Broker we are monitoring the situation very closely and liaising with insurers to establish their respective positions.
It’s very difficult to provide definitive specific advice as every client has their own unique circumstances and every insurer wording for every relevant policy type may have its own definitions and exclusions.
Below are some of the key areas we are receiving enquiries about:
Travel Insurance
Generally speaking, if you bought your policy prior to the outbreak and have a travel disruption section, you may be covered if the trip is cancelled or curtailed outside of your control.
Where the FCO (Foreign & Commonwealth Office) have advised against all travel or all but essential travel and you had previously purchased tickets before the FCO travel advice was given, you may be covered if you wish to cancel your trip or return earlier than planned.
We are monitoring the situation closely but if you are travelling to other locations not listed by the FCO, you would not be covered if you wish to cancel your trip or return earlier than planned.
Medical treatment sought whilst travelling should be covered, however, you should be aware that treatment is subject to the locally available facilities and medical repatriation or transfer to alternative medical facilities will be subject to any travel restrictions which are in place.
Business Interruption Insurance
Some policies may cover disruption to the business caused by the outbreak of a notifiable disease or specified diseases, but this is dependent upon there being a full Loss of Profit or Revenue policy with a disease extension.
Many policies won’t respond as they only cover “specified diseases” of which Coronavirus along with previous outbreaks such as SARS & HN51 are not listed.
Furthermore, most policies restrict the interruption to the business location only and a limited vicinity surrounding it (e.g. within 1 mile).
So, whilst COVID-19 has been classified as notifiable, this merely means you must declare contracting it to the Government and does not necessarily mean it is insured.
Employers' Liability
From a liability perspective, there could be some exposure to your business as specified diseases are not normally excluded.
However, you would have to be proven negligent in some way, before any such claim could be considered under the policy. For example if you permitted staff to travel to areas which are against World Health Organisation (WHO) or Government (Foreign Office) advice.
Public Liability
Further guidance is expected from insurers but it’s not beyond the realms of possibility that a Public Liability claim could be considered for bodily injury caused to a third party through the spread of a disease, if negligence could be proven.
Pandemic Planning For Business
The following post is taken from INONI who are Business Continuity Specialists and is intended to support businesses with their pandemic planning.
It includes a suggested approach and an opportunity to download their own Pandemic Plan as an example.
Why do we need a pandemic plan for Coronavirus?
In the current situation, there are good reasons to have a well-formed pandemic plan:
In any case, there are clear steps you can take to understand the situation and create a dedicated pandemic plan. The start point is remembering that your organisation has a unique profile, with a mix of customers, processes, suppliers, geography and boundaries distinct from any other. A simple template will potentially miss these points and dilute outcomes. Ideally, use an open exploratory approach that links infection and external behaviour with the specific needs of the business.
What do we know and how does this affect planning?
Information regarding the COVID-19 virus is still uncertain, however current findings suggest:
Infection behaviour suggests that at the point where one person in the workforce is diagnosed, many more may already be infected, depending on their movements in the preceding 2 weeks and the measures you have imposed. Taking early decisive action could save stress and discomfort for many.
A further implication is that the workforce can be moderately well-protected by education and application of simple physical measures. These include appropriate use of sanitising gels and masks. We can add symptom recognition, segregation, prohibiting access to communal areas, kitchens, intensive disinfecting of surfaces, avoiding all non-essential travel and meetings.
A model for writing your plan
Below is an outline plan based on Inoni’s own evaluation.
| Layer | Pandemic Challenges | Preparatory measures | Recovery measures |
|---|---|---|---|
| Stakeholder | Customer meetings postponed Investor loss of confidence Media intense interest Projects and payments delayed Opportunities missed Demand reduced |
Agree verbal communications Agree relationship deputies Bring meetings forward Brief investors and media on plan Crisis management plan and training |
Webex and phone meetings Deputise in absence Implement crisis management |
| Product and Service | Face-to-face services halted Perceived contamination Logistical distribution failure |
Agree verbal delivery e.g. webex Correct assumptions Arrange resilient logistics |
Webex and phone meetings Be ready to disinfect Implement logistics solutions |
| Financial | Liquidity and cash flow | Build or arrange liquid funds | Draw down funds |
| Process and Activity | Serial widespread absence Single point process failures Management and control Productivity reduction International travel Public transport |
Educate staff Develop pandemic policy Resilient process design Test work from home capacity Test remote management Stockpile gels and masks |
Reinforce education Apply pandemic policy Distribute masks and gels Work from home Segregate in-office areas Close communal areas |
| Skills | Key staff absence | Cross-train or retain 3rd parties | Deploy deputies or 3rd parties |
| Plant and Equipment | Key operator absence Reducing spares, maintenance Increasing failure rate |
Cross-train or retain 3rd parties Stockpile critical spares Maintain critical equipment |
Deploy deputies or 3rd parties Draw-down spares as needed Maintain critical equipment |
| Buildings | Quarantined exclusion | Prepare alternate site Plan for Loss of Site (BCP) |
Mobilise alternate site Loss of Site strategy (BCP) |
| Systems and Data | Key operator absence Data quality degradation Security degradation Reliability degradation |
Cross-train or retain 3rd parties Maintain critical systems |
Deploy deputies or 3rd parties Maintain critical systems |
| Suppliers | Key supply failure Production failure |
Stockpile critical supplies Identify alternate sources Review supplier pandemic plans |
Draw down from stock Mobilise alternate sources |
Each point in the model is intended to be fluid and can be adopted and developed further for the organisation to best address its specific needs. So, for example, a call centre operation may devise different measures from a consultancy, similarly a retail outlet will necessarily adopt a different pattern of measures from a steelwork.
Finally, in addition to applying and practically interpreting the model, you may find it helpful to form a crisis management team responsible for setting expectation, direction, pandemic policy and delivering consistent optimum messaging to the stakeholder community. Obtain all the information you may need to communicate effectively with staff and all third parties.
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