Insurance and COVID-19
CORPORATE travel insurance is the ‘utility knife’ of the business insurance world, it does a bit of everything…accident & sickness, property, contingency and emergency assistance.
It’s therefore easy to think that it covers all risks your business and staff face when travelling locally or overseas.
The coronavirus (COVID-19) is a timely reminder that certain uninsurable risks are present in every aspect of business and insurance should not be your sole risk management strategy.
Any diligent and insured person would be asking themselves, does my corporate travel policy cover cancellation costs and medical costs associated with coronavius (COVID-19)?
The issues need to be considered in two separate sections.
1. Cancellation costs
2. Medical costs arising from the virus.
In general, if you commenced or renewed your corporate travel insurance, and booked a trip, and are traveling to a LEVEL 4 – DO NOT TRAVEL country, prior to coronavirus becoming a listed disease under the Biosecurity Act 2015, you may have cover for cancellation costs.
The general theme of cancellation cover…was it an issue before you booked/took out the policy i.e. did you know about it and is the DFAT advice DO NOT TRAVEL?
If you decide to go to a LEVEL 4 – DO NOT TRAVEL country, you’re essentially on your own because you’re accepting a known risk.
For LEVEL 3 and below, medical costs relating to coronavirus should be still be covered.
If or when the World Health Organization (WHO) define the virus as an ‘epidemic’ or ‘pandemic’, there will be no cover regardless of any other factors as this is a typically blanket exclusion.
As this situation is constantly evolving, the insurer’s position will continue to change in line with government warnings. It is also possible for the travel advice or virus classification to change whilst you’re on a trip so it’s important to stay up to date with smartraveller.gov.au.
For the insurance pessimist, this will be seen as another opportunity for insurers to avoid paying genuine claims.
For the realist, they will understand that these types of exposures cannot be economically underwritten so cannot be easily insured.
For insurance to be sustainable and economical, there needs to be limitations and protections in place for widespread and devastating losses, should they occur.
If in doubt, always speak with your insurance provider to receive personal advice about your specific policy.
This advice is general in nature and should not be relied upon for your individual circumstances.
“COVID-19 is a reminder that certain uninsurable risks are present in every aspect of business...
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