Covid-19 Update from Wills Towers Watson
Re: Caronavirus (COVID-19) |LPO Network Update
Recently we have received inquiries from members regarding the Coronavirus and have accordingly prepared information to help members who currently take up our Industrial Special Risks (ISR) cover better understand how the policy would respond to such circumstances. The ISR policy does provide limited cover for loss of income resulting from human infectious or contagious disease as outlined in the relevant clause below. This coverage is subject to a $250,000 policy limit (in the aggregate), however this does not apply in this instance as per the operative words highlighted in yellow:
Chubb Human and or Human Contagious Disease Endorsement
Loss as insured by this Policy resulting from interruption of or interference with the Business directly arising from an occurrence or outbreak at the Insured’s premises only and limited to:
closure or evacuation of the whole or part of the Premises by order of any Government, Local Government or other Statutory Authority consequent upon:
1. Any occurrence of a human infectious or human contagious disease at the Premises,
2. Food or drink poisoning,
3. The discovery of vermin or pests at the Premises,
4. Defects in the drains or other sanitary arrangements at the Premises,
5. Any occurrence of murder or suicide at the Premises.
shall be deemed to be Damage to the property used by the Insured at the Premises.
In respect of Item 1, any occurrence of any prescribed human infectious or human contagious diseases under the Quarantine Act 1908 and subsequent amendments are excluded from this coverage.
For the Purpose of this Extension:
Indemnity Period shall mean the period during which the results of the Business shall be affected in consequence of the Damage, beginning with the date when closure or evacuation of the whole or part of the Premises occurs as ordered by any Government,
Local Government or other Statutory Authority and ending not later than three months thereafter.
The Insurer shall not be liable under this Extension for any costs incurred in the cleaning, repair, replacement, and recall or checking of property.
The Insurer shall only be liable for loss arising at those Premises which are directly subject to the Damage.
We understand the uncertainty in the current environment however the policy endorsement is clear that unless the insured premises is closed by authorities, the ISR typically wouldn’t respond. It is important to understand clauses similar to the above appear and are standard across the insurance industry in similar policy structures and will therefore apply to a majority of insurance policyholders.
Should you have any specific inquiries to your premises, have had your premises ordered to be closed by relevant authorities, or would like clarification on the above please reach out to our team.
Willis Towers Watson
Willis Australia Limited