Coronavirus – Insurance implications, our views
We have all read and heard so much about this dreadful virus, and the terrible personal effect on people, communities, businesses, economies and countries. I am sure we have all, also seen the health notices and guidance on how to protect oneself, or at least, reduce the risk of contracting the same. This blog/article is not to repeat what you may or may not know already, but we hope it will give some answers to questions that have been asked of us, in respect of insurance cover, for businesses or travellers. Sadly, we do not have all the answers, as the position is changing almost daily, plus, some information we provide may alter over the coming period. We will try to up-date you when we know more.
Fundamentally, we do not know of a commonly purchased insurance policy that has been available in any market, that would protect any business from reduced bookings, guests and visitors as a result of the virus, whether present at the premises, or a possibility. Furthermore, shortage of raw materials, lack of imports or inability to export and the Worldwide affect the virus has had on business, there is no insurance locally that will respond to this. Indeed, in the UK where covers can be available, the major Insurers have announced that Covid-19 is excluded and will be specifically excluded going forward. As such, businesses have to try to ride out this terrible period and hope that there is relief as soon as possible. If you have Business Interruption insurance, it is highly unlikely it will provide any cover for you.
Many of our clients are in the hospitality and tourism sector and we have looked further at some of the questions raised.
As mentioned above, reduced bookings and therefore Turnover, are not covered by Business insurances. Unfortunately, whilst Travel covers can assist the guests (more of that later), in the event of cancellation of their stay, those providing services/accommodation, will need to look carefully at the booking conditions to see what cancellation fees are chargeable, or whether the business is able to transfer the trip to a later date. Your booking conditions and trading agreements, with agents and the likes, need to be reviewed.
So many questions and misconceptions have arisen on this subject, so we hope we can clarify the latest position, but again, this really depends on your own policy and circumstances, and, again, this situation changes almost daily. Even in the last two days, we have heard of dozens of UK Insurers ceasing the sales of new Travel policies, plus those that are, are now specifically excluding any claim in relation to Covid-19. As such, if you haven’t already booked your Travel cover, there will be specific changes in most instances.
Dealing with Travel insurance generally, and again, we remind you that this is only our understanding of the situation and also relates to our JWS Travel policy. Firstly, if you arranged your Travel cover before the Covid-19 was a worldwide issue, and you contract the virus, your Travel insurance policy should meet the costs of cancellation, subject to you getting evidence from a Medical Practitioner. Further, in the event of you contracting the virus whilst on holiday, then your policy should meet the medical costs, curtailment costs and where there is a required quarantine, then this should also be covered.
For those, however, who are buying Travel insurance now for a forthcoming trip, then you need to be careful. Firstly, refer to the above comments about Insurers imposing new exclusions, so watch that and secondly, most Travel insurance policies have exclusions stating that if you are aware of any circumstances that may prevent you to travel, or arranging travel cover when there is a Government advisory, so you need to check these clauses before believing you have adequate Travel cover.
Now the slightly more complex and confusing part, and this relates to a traveller’s decision not to travel; as they do not feel safe or are uneasy about travelling generally. This, falls under the terminology of ‘Disinclination to Travel’ and is a general exclusion on all policies that we have reviewed. In those circumstances, the only advice is to ask your travel organisers. airlines, accommodation provides, etc., what they can do for you in terms of refunds or delaying the trip.
As a result of this exclusion, plus the comments made above regarding ‘knowledge of the circumstances’ and therefore potentially being excluded, we have been asked the question about what the situation is regarding cancellation of trips owing to a Government advisory. This is a more long-winded matter and we will try to advise you from what we have gleaned from our Insurers, other Insurers, government announcement and media coverage.
Some Travel policies have a ‘travel disruption’ cover option, which in effect, provides cover in the event of Government advisories. Our own JWS Travel policy does, but this is restricted to terrorist or war related incidents, it does not cover circumstances like Covid-19. It is an unprecedented set of circumstances and one that very few people could ever envisage happening. We hear the cover is currently being withdrawn by other Travel Insurers, plus the suspension of selling travel cover, plus some Insurers are currently ‘sitting on the fence’ to make further decisions.
So, what can you do about the costs you have incurred to date? Well, this is fundamentally down to the airlines, accommodation providers, etc. We believe it depends very much on whether you have booked directly or through agents, whether the agents are protected by bonds and guarantees, like ATOL, ABTA, IATA and the like and when the booking was made and for when. You will need to speak to the relevant organisations for more advice on this.
Under the WIBA Act, ‘occupational illnesses’ are catered for. We cannot state categorically that Covid-19 would be deemed an ‘occupational illness’ although some may suggest that if it is caught at work, then it is. Our WIBA policies do not exclude pandemics, but you may wish to check your own covers with your Insurers.
Again, this is an unknown situation, but you should be aware of the risks. In the event that an employee contracts the virus and can evidence that the Employer did not give adequate guidance or took action at work to contain the illness, they COULD, sue for negligence. It is therefore prudent to have adequate cover.
In the same way that employees have a right to be protected, so do they members of the public. It is highly unlikely that employees or the public would take action, but not impossible. Just ensure your Liability policies are up-to-date and adequate.
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