Coronavirus & Insurance Information – 18/03/2020

While Australia has been relatively protected from the spread of the novel coronavirus (COVID-19) to date, many businesses have been disrupted due to travel, import and/or export restrictions.

JHR we believe in being open and transparent about the insurance cover our clients hold. Below we outline common insurance products and the probable impact of COVID-19 on certain covers.

Cover for pandemics

Many factors affect whether a loss would be covered under insurance, including the type of loss, the type of cover, the terms and conditions of specific policies and the policy wording.

General insurance policies typically provide protection against losses stemming from insured events such as fire, burglary or storm. The majority of general insurance policies and products specifically exclude claims relating to loss or damage resulting from outbreaks of infectious diseases, pandemics, epidemics and/or known events that could lead to a claim.

In light of these general exclusions, it is unlikely that most general insurance policies will provide protection for losses associated with COVID-19.

However, certain insurance policies such as trade credit, liability, Workers’ Compensation or Corporate Travel policies may cover coronavirus losses. Please speak with your JHR  Account Manager about the specific policies you hold if your business has been affected.

Travel Insurance – Leisure

These policies are designed to cover you for a particular private or leisure trip. When it comes to covering the costs associated with cancellation, some policies have a blanket exclusion for pandemics, others do provide coverage where the travel warning issued by the Australian Government reaches a certain level i.e.  ‘Level 4 – Do Not Travel’.

If you elect not to travel due to a fear of the consequences, but the travel warning has not reached Level 4, then your insurer is unlikely to provide cover for any lost fares, accommodation, etc.

Since COVID-19 has become a listed disease by the Australian Government, any requests for leisure travel insurance since the end of January are likely to have blanket exclusion for any losses arising from the disease.

Travel Insurance – Corporate

Unlike leisure travel, corporate travel policies are designed to cover all travel during the period of insurance.

Corporate travel insurance policies that were taken out or renewed before COVID-19 became a listed disease under the Biosecurity Act 2015, are likely to provide cover for cancellation of trips to countries where the Department of Foreign Affairs (DFAT) has declared a ‘Level 4 – Do No Travel’ warning.

A decision not to travel, where the DFAT warning is not at the trigger level stated in your normal corporate travel policy will not – under normal circumstances – activate the insurance cover.

Now that COVID-19 has reached the listed disease level, most insurers are placing a specific exclusion on losses occasioned by or happening through the coronavirus outbreak. This may be lifted once the disease is brought under control but only time will tell.

Today 18th March 2020 the Federal Government raised its Travel Warning to Level 4 – Do Not Travel!

This will, in most circumstances “trigger” claims under your Corporate Travel Insurance Policy should you suffer a loss in this regard.

If you have a loss in this regard, please contact your JHR Account Manager without delay to formalise a claim for your insurer’s consideration.

Business Interruption

While there may be exceptions, the cover afforded by both Business Packs and standard Industrial Special Risks policies, is contingent on the interruption resulting from “direct physical loss or damage” to insured property caused by a covered peril, which outbreaks such as COVID-19 are not.

Most Business Interruption Insurance policies do extend to include cover for “Infectious or Contagious Diseases; Vermin, Pests or Defective Sanitary Arrangements; Food or Drink Poisoning; Murder, Suicide (B)” as Damage within the coverage of the Policy (PDS) which emanate at your Premises.

The policies do however exclude cover for “interference with the Business directly arising from or in connection with Highly Pathogenic Avian Influenza in Humans or any other diseases declared to be quarantinable diseases under the Quarantine Act 1908 and subsequent amendments.

COVID-19 is a listed disease , this means that there is likely no insurance protection for disruptions.

Businesses should also consider their contracts, industrial agreements and / or applicable modern awards prior to imposing any annual leave, sick leave, stand-downs, etc, on workers. If unsure, the business should seek specific legal advice.

Businesses should consider reviewing their contracts with their clients and/or entering into discussions with their Clients in respect to managing any “Contractual Penalties” for delay or non performance which may arise as a result of the Covid-19 Virus.

Workers’ Compensation

In the event a worker contracts COVID-19 due to their work, whether in Australia or whilst working overseas on short term assignment, or within their workplace, a claim for workers’ compensation may be lodged. Similar to other work injuries, to establish an entitlement to compensation, COVID-19 would need to have been ‘contracted in the course of employment’ and meet the requirements of the relevant workers’ compensation legislation.

Questions may arise as to the exact time and place of contraction as it can be difficult to accurately determine. Each claim would need to be considered on its individual merits, specific to the individual circumstances and evidence in relation to the claim.

It seems the most significant workers’ compensation risk for employers is in respect of psychological injuries caused by an overreaction to the risk. There have been examples in the broader community of people overreacting to the risk by harassing members of the community. Employers should be very careful to guard against such risks and ensure that any mitigating steps they take in response to Coronavirus are measured and that their employees treat people from at risk countries with respect.

As with all claims, it is important employers provide any required guidance and assistance to the worker. The issue of causation would need to be assessed and investigated by the insurer. It is therefore crucial all employers manage the risk to help mitigate any potential claims.

For specific information regarding Coronavirus and Australian Workplace laws, please refer to the Australian Fairwork Ombudsman website.

Marine Insurance

While some risks may be insurable under specialist policies, Institute Cargo Clauses (A) is the standard coverage for most marine cargo insurance policies. There is no exclusion of epidemic; however, exclusion 4.5 excludes loss, damage or expense caused by delay, even though the delay be caused by a risk insured against. Most standard marine cargo insurance policies will generally require physical loss or damage to the goods so, in the absence of actual physical loss or damage the policy will not respond.

Marine Insurance policies will offer limited support in response to the consequences of COVID-19 impacting cargo in transit. However, to the extent that policy holders have their product held up in the supply chain they will have full cover on goods for all risks of loss or damage to the product that is delayed during the ordinary course of transit.

Managing risks in the workplace

Currently the advice is that there is no need to be unduly alarmed or to panic, and that while COVID-19 is of concern, according to the Australian Government Department of Health: “…it is important to remember that most people displaying symptoms such as fever, cough, sore throat or tiredness are likely suffering with a cold or other respiratory illness—not coronavirus”.

Whilst the Federal Government has raised its Travel Warning to level 4, this is still not reason to be unduly alarmed or to panic. It is a time to exercise a greater degree of caution in what and how we do things etc.

Both employers and employees have a duty to take reasonable care for their own and others’ health and safety in the workplace. Current advice is that practising good hand and sneeze/cough hygiene is the best defence against most viruses.

To help mitigate the risk, drive operational resiliency and support duty of care for employees, business owners should:

  • closely monitor the medical advice and official reports, such as updates from the Australian Government Department of Health and World Health Organization;
  • review policies and measures for infection control, including educating workers on best-practice;
  • have a fully documented and exercised business continuity management plan in place;
  • provide information and regular updates to workers on any changes to organisational policies or procedures and links to relevant services should they require support;
  • encourage workers to keep the business informed of non-work-related travel plans;
  • update travel rules and arrangements, limiting non-essential business travel;
  • advise workers to self-isolate for 14 days if they have travelled to certain overseas destinations or been in close contact with anyone confirmed to have the coronavirus; and consider or extend flexible working arrangements to reduce the likelihood of the spread of the virus in the workplace or community.

How to stay informed

Everyone should remain alert for updates and advice from the relevant authorities on additional steps to manage the spread of COV-19.

The following resources, advice and sources can be consulted for regular updates:

  • For state-based health information: ◦Australian Department of Health

◦NSW Healthwww.health.nsw.gov.au

◦Victorian Health and Human Services

◦Queensland Health

◦SA Health

◦ACT Health

◦WA Health / Healthy WA

  • For national and international health information: ◦World Health Organization

◦Australian Department of Health

◦Australian Health Direct (includes a symptom checker)

  • For workplace and business information: ◦Safe Work Australia

◦Fair Work Australia

◦Government of Western Australia, Department of Mines, Industry Regulation and Safety

◦Business.gov.au

◦Insurance Council of Australia

  • For the latest Australian travel warnings: ◦Smartraveller

 

If you have any questions in respect to this Information Fact Sheet please contact your JHR Account Manager.