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Insurance industry in the spotlight over coronavirus

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Insurance Professionals are poring over contracts to see if epidemic is covered

Individuals and organizations are scrutinizing their insurance policies to see if they are covering the losses caused by the epidemic.

Companies and individuals affected by the coronavirus are facing an agonising trawl through the small print to see whether their insurance policies cover costs.  On the ground, several insurers have also launched efforts to support the fight against the infection. What happens with Business Interruption, D&O and E&O claims?

Industry experts said a wide variety of polices could pay out, but that epidemics and pandemics were often deliberately excluded from cover. It is far too early, they added, to make estimates about what the overall cost to the insurance industry might be.

“Clients are asking about the extent of their cover,” said Clarissa Franks of insurance broker Marsh. “Clients with manufacturing in the key regions of China will be affected.”

Three areas of insurance are most likely to be hit: travel, business cover (Business Interruption, D&O, E&O…) and life insurance.

More than a dozen airlines including British Airways, American Airlines and Cathay Pacific have cancelled some or all of their flights to and from mainland China. Most airlines are offering refunds or rebooking on to different flights. What happens with travel insurance policies?

The large number of cancelled flights, combined with travel restrictions into and out of affected areas, means many travel policies could pay out. Companies and events affected by the outbreak are also likely to be looking to their insurance.

On the other hand, usually purchased as part of a company’s commercial property insurance policy, business interruption insurance is intended to protect businesses against income losses sustained as a result of disruptions to their operations.

Contingent business interruption coverage similarly provides insurance for financial losses resulting from disruptions to a business’s customers or suppliers, usually requiring that the underlying cause of damage to the customer or supplier be of a type covered with respect to the business’s own property.

To sum up, it is time for an insurance policy checkup…

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Insurers’ response to coronavirus on the ground

In China, the epicentre and worst-hit country, several insurers have taken action to respond to the health crisis. In a statement, Allianz, through its wholly-owned Allianz (China) Insurance Holding Co., announced that it has pledged a RMB4 million (US$570,000) emergency response fund to support frontline workers. This fund will provide medical supplies, donations, and insurance protection.

Two of the insurer’s operating entities in China, Allianz China Life Insurance and Allianz Jingdong General Insurance, have also launched some temporary emergency measures for the convenience of customers. These measures include implementing fast track claims process, removing restrictions on designated hospitals and drugs, waiving deductibles, and eliminating waiting periods.

Meanwhile, Ping An Healthcare Diagnostics Centre has dispatched its mobile computerized tomographic (CT) imaging vehicle to Renmin Hospital of Wuhan University. It will be used to support diagnosis and treatment for pneumonia associated with the 2019 novel coronavirus, according to a statement by Ping An.

Sources: Financial Times, Insurance Business Magazine and iNLIP

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