Learn what steps management can take to best safeguard their organisation in the absence of any commercial insurance protection.
The World Health Organization pronounced the novel coronavirus COVID-19 outbreak as a “pandemic” on the 11th March 2020. Coronavirus is the latest in a string of viruses, such as the Severe Acute Respiratory Syndrome (“SARS”) and Zika, to impact the globe. SARS caused an economic toll of close to $40 billion, and there are many who fear the coronavirus could exceed this.
Insurers have taken steps to ensure their exposure to pandemic risk is adequately managed. Some insurers have included endorsements within policies to place sub-limits for pandemic risk, while others have excluded the risk in its entirety. The argument from insurers is that if pandemic risk was included within policies, the cost would not be commercially viable for clients.
For a business, pandemic risk can be very complex and have a significant impact on operations. Whether considering the health of staff, risk to the supply chain, or business interruption impacts, such as event cancellation, there is a significant burden on management to understand and mitigate the risk as best as possible.
This raises the question of how management can best safeguard their business in the absence of any commercial insurance protection.
In short there isn’t a simple pre-packaged solution, however there are a variety of stages that can offer management a degree of comfort:
Once management have a thorough understanding of the current program and the potential approaches available to mitigate pandemic risk action can then be taken to protect the business moving forward.
If the insurance coverage isn’t enough for the risk presented a business has two primary options:
If you would like to discuss further, please contact Jonathan Barnes.
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