Avian Influenza commonly referred to as Bird Flu is an infectious disease which understandably has made world wide media headlines.
Bird Flu is an infectious disease of animals caused by viruses that normally infect only birds. These viruses have, on rare occasions, crossed the species barrier to infect humans (World Health Organisation).
Bird Flu has been with us for a long time. The first highly pathogenic form dates back to 1878. The current strain, H5N1, which is thought to have originated in South-east Asia in mid 2003 has resulted in the death or destruction of some 150 million birds. At the time of writing (January 2006) outbreaks were reported in 9 Asian countries and more recent reports advise the virus was detected in Russia, Kazakhstan, Mongolia, Turkey, Romania and Iraq.
The virus is thought to have infected humans when they have come in direct contact with diseased poultry or surfaces contaminated by the diseased birds. As at January 2006 it appeared the virus had not mutated to allow it to be rapidly transmitted between people. If this occurs there are concerns of a global outbreak.
As at 30 January 2006, 160 human cases were reported resulting in 85 deaths across 7 countries.
What are the implications for property insurance?
The Operative Clause of Section 2 of the Mark IV Industrial Special Risks policy responds to Business Interruption as a consequence of damage to insured property.
Infectious diseases may cause a diminution in trade without any property damage and if so, the standard policy is unlikely to assist.
However, endorsements are available which extend the Business Interruption cover to loss flowing from incidents where there is no damage to insured property. One of these is an endorsement for infectious diseases.
Typically, this responds to Business Interruption loss from: -
- Infectious or contagious disease manifested by any person whilst at the Premises.
- Evacuation of the Premises by a Public Authority.
- The outbreak of a notifiable human infectious disease occurring within a specified radius of the Premises.
While the circumstances of each claim need to be individually considered it is not difficult to construe a case where this endorsement may well cover the Business Interruption losses sustained as a result of the spread of the H5N1 virus. Claims may be limited if the virus remains contained to poultry but the financial losses may be considerable if human to human transmission occurs!
Author
Published with permission of Claim Solutions Pty Ltd.
Insurance Policy
Country: - Australia
Policy Description: - Mark IV Industrial Special Risks (ISR) policy
Insurer: - Various
External Links
