ARTICLE · 05 MARCH 2020

Insurance for COVID-19 losses

Herbert Smith Freehills Kramer LLP

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The Coronavirus and the consequential action by Chinese authorities to quarantine areas and close factories is causing significant disruption to supply chain logistics for businesses all over the world.

AustraliaInsurance

Mark Darwin

The Coronavirus and the consequential action by Chinese authorities to quarantine areas and close factories is causing significant disruption to supply chain logistics for businesses all over the world.

Many Australian policyholders are asking: can the adverse financial consequences of the interruption be claimed on insurance? The short answer is typically not, but we wonder if it is possible that a combination of optional extensions to Industrial Special Risks (ISR)/business interruption insurance policies may cover the losses.

Cover for business interruption

Traditionally, business interruption cover needs to be triggered by (1) 'Damage' at (2) the insured premises. Obviously, the Coronavirus does not cause any damage, nor does it occur at the (Australian) policyholder's premises.

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