As at March 12, the World Health Organization (WHO) confirmed that the coronavirus COVID-19 outbreak had become a pandemic. This came at a time when the Australian government had announced a stimulus package to cushion against economic collapse of the economy.
In line with this, the Insurance Council of Australia (ICA) also announced that the worsening COVID-19 epidemic in Australia would turn into an “insurance catastrophe”.
Outside of Australia, the disease has continued to savage global economies, leaving businesses and governments counting major losses. No doubt, the economic impact of coronavirus is huge, and the evidence of the disease’s devastation wreaking global markets climbed on Tuesday 10th as activity surveys for the month of March indicated record falls for Australia and Japan, with surveys in the United States and Europe expected to be just as shattering.
While the information concerning this issue remains scanty, the fact that the coronavirus outbreak in Australia continues to increase and in its initial stages, the ICA only issued a classification of the virus and some useful information.
According to the Council, the virus and its implications are ‘catastrophic’ for not just the economy but the insurance sector as well. The Council further stated that the extent of losses and claims in relation to the impact of coronavirus was uncertain at this juncture but revealed that an insurance sector taskforce had been constituted to ensure the accuracy of claims data being captured by the sector and that the position of insurers on the new virus is well understood by stakeholders.
The ICA also provided additional information to give clarity on the policy that covers the virus, though issues related to travel and or business interruption insurance were to receive more priority.
“Most travel insurance policies have exclusions for outbreaks of infectious diseases, pandemics, epidemics and/or known events that could lead to a claim,” the ICA statement read in part. “Travel insurance policies purchased after COVID-19 became a known event are unlikely to cover travellers who are overseas or who are yet to travel for coronavirus-related expenses.”
Business Disruptions Would Be Equally Difficult To Claim
It was recently discovered that it is challenging for Aussies to make a claim on things unlikely to happen on the company’s actual premises.
Insurance policies for losses as a result of infection and accompanying effects rarely include things far-fetched from incidents within or in close proximity to the business premise.
Storm Assist can confidently report that Martin Miller, the director and global head at Crawford Forensic Accounting Services confirmed the facts in this thesis as true and reliable.
“General excess can sometimes cover other locations,” he stated. “But generally speaking, for infectious disease cover, that infection has to occur on the premises itself to apply.”
The ICA has recommended that those not sure about whether or not their insurance policy covers them for coronavirus related losses should contact their broker or insurance firm for more information.