We are aware of a number of insurers now introducing Coronavirus and Pandemic Exclusions into their policy wordings. and it seems that this may become an industry wide practice.
Whilst there are specific Coronavirus exclusions being introduced we are also seeing a broader version of a more general nature that applies to any pandemic outbreak.
The insurance industry, like everyone else has been taken by surprise by the sheer strength and scope of the Government reaction to the COVID-19 outbreak, not jus in the UK but across the world. This is, as we are constantly reminded unprecedented.
There has been a considerable amount of discussion on whether insurers generally should be meeting the cost of client’s losses and whilst this furore is understandable, it is also fairly clear that this is not something that is generally covered under policies. The truth being that the cover would not actually be available for the majority of potential customers if they had chosen to seek out the cover.
Insurers choosing to introduce a specific and absolute exclusion under policies to provide clarity is understandable if not perhaps desirable.
Certainly in many cases it is hard to see the basis for a string of claims under public liability insurance products but the exclusion if applied to property based insurance such as commercial combined and shop will certainly offer clarity if not cover under the business interruption section of the policy. We have already seen exclusions introduced to products that may be seen as more specifically related such as travel insurance and personal accindet and illness insurance.
Whilst the presence of the exclusion remains with a few selected insurers rather than market practice, it is important for brokers to bring the exclusion to the attention of clients.