How Viral Outbreaks, Like Coronavirus, Affect Insurance
Feb 22, 2020
By now, you're no stranger to the viral outbreak, Coronavirus, that is still affecting people worldwide. Countries around the world continue to grapple with its impact on global health as the death toll rises each week. Another area of concern though is how the Coronavirus outbreak is affecting insurance policies and economies. We elaborate on how the industries facing the most impact from Coronavirus are travel, business and life insurance:
Due to the viral nature of the Coronavirus, many areas, especially in Asian countries, have had to place quarantines and work closures. This has resulted in widespread flight, travel, and event cancellations, and has obviously forced businesses to shut down due to the government enforced closures. As these mass cancellations roll in, companies have had to turn to their insurance policies to cover the losses. The additional, unfortunate reality too is that, as the death toll continues climbing, life insurance claims also rise.
Corporations and businesses in the tech industry have already voiced their concerns for how the outbreak and, subsequently, the work closures are affecting their revenues. Similarly, viral outbreaks like the Coronavirus causes people to be more cautious and wary of traveling internationally. This shift in outlook has put a strain on travel and hospitality industries and their sales.
Since similar outbreaks like SARS and Zika, insurance companies have put in exclusions related to viral or flu pandemics in most basic policies. This means when airlines, hotels and events have to refund customers due to cancellations, they will have to take the financial blow of losses themselves. Likewise, businesses forced to close down that try to use their business interruption coverage may run into some difficulty - most policies are likely to exclude diseases and outbreaks.
A notable takeaway from this unfortunate and tragic pandemic has been the importance of reviewing your insurance policy with your broker to fully understand your exclusions. Even if you are a business owner and have not felt the direct effects of the Coronavirus, it is still a lesson worth applying with your own business insurance. At Foxquilt, our insurance experts are happy to review your needs and guide you through your specific coverages along the way. You can even join up with other business owners for group savings on your business insurance.
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