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Coronavirus (COVID-19) Insurance Guidance

10th March 2020
London train/metro station

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 – see attached.

Why do we need a pandemic plan for Coronavirus?

In the current situation, there are good reasons to have a well-formed pandemic plan:

  • Covid-19 has a distinct profile and a probable pattern of effect. Potentially, staff may be quarantined or hospitalised in clusters as infected individuals continue working with colleagues up to the point of diagnosis. Those infected are likely to be absent for a significant period since for example, a parent with children could be off work for a month or more, returning to work exhausted by the experience. You need to plan for this or a similar pattern of events.
  • A piecemeal or half-hearted response could raise the impact as avoidable transmission takes place. There should be a coherent agreed strategy for ensuring business comes through the outbreak acceptably. It makes sense to apply a unified and agreed plan, so all staff and management apply policy and are clear on what is expected of them.
  • We inherit aspects of our suppliers’ risk. This means that any pandemic-related issues they face, directly or indirectly, could reduce the levels of service you receive. This includes supply of raw materials, parts, services, utilities, sub-contractors and so on. You need to know what to do if any supplier fails to deliver as planned. It may help you to know their pandemic plan.
  • Few insurance policies provide cover for widespread absence in your organisation or for failure of key suppliers for this same reason. This is a key driver for having your own pandemic plan.
  • You need to maintain stakeholder confidence before, during and after any disruptive pandemic event. This includes customers, investors, media, staff, suppliers and every party with a vested interest in your organisation. To keep them on-side they need to see and believe in your decisive actions under difficult circumstances. Again, this needs to be thought-through and coordinated under a planned crisis management and communications structure.
  • Most of the requirements implied here can be accommodated under the umbrella structure provided by a business continuity plan (BCP).
  • 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:

    • Transmission is via droplets, requiring proximity up to 2m or via infected surfaces
    • Incubation is between 2 and 14 days, before symptoms are displayed, but may be longer
    • Victims remain infectious from within a few hours of infection, until symptoms are cleared
    • Mortality rate and recovery time varies according to severity, age and health of victim but likelihood of death in a typical workforce age 20-60 with 100% infection is c. 1.5%

    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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