Venture Offering Airborne Disease Coverage Venture Programs is offering coverage to protect its clients with country clubs against loss of income due to terrorist-related anthrax attacks, with intentions to expand the offering to other businesses if all goes well.
"Our desire to protect our clubs in an area that would not be covered by the terrorism act was our initiative to provide this coverage," said David Callaghan, program manager of Venture Programs in West Chester, Pa. "When the terrorism law was passed, it did not address the business income aspect of possible exposure for a country club. Since that is what we specialize in, we wanted to address that possible loss for our clients."
The policy also covers other airborne diseases such as Legionnaire's disease, a respiratory infection; the Norwalk virus, an intestinal illness; and radon, a naturally occurring and potentially deadly gas.
Mr. Callaghan explained the impact that such an event can have with the example of when the Norwalk virus struck a Disney cruise ship last November, causing 218 people to fall ill.
"The incident prompted Disney to cancel a future trip and may have caused travelers to reconsider taking a cruise," he said.
Venture, which partners with carrier groups including Alea, Chubb, Hartford, USLI and Hiscox Syndicate 33 at Lloyd's of London, is now offering the coverage to more than 1,000 country clubs and golf industries nationwide through its Preferred Club Program. The coverage is offered in conjunction with either writing a new package policy or renewing a package policy.
The coverage, Mr. Callaghan said, supplements actual loss of income sustained as a result of closure of an insured hospitality business by order of the State Health Authority or the Center for Disease Control in Atlanta.
Limits for the coverage are $100,000 or $250,000. Premiums will range from $1,000-to-$1,500 annually, Mr. Callaghan said.
Mr. Callaghan explained the thinking behind the seemingly low limit of the policy. In the event of a loss, he said, members most likely would not have dues refunded. They probably would still be able to play the golf course. "Chances are if anything happened like this, the entire premises would not be shut down for any length of time," he said.
This is based on "what we've seen happen," he said. With the post office, for instance, which stopped all activity during anthrax contamination testing, "they closed the building, but they didn't close the street.
"In coming up with a limit you need to say what source of income does a private country club get other than from its membership?" he continued.
Most of a country club's additional income is made through the building housing the restaurant where weddings and other special events are held, he said. "A private country club really generates a good portion of its income to help hold down the dues this way. So the product was developed to help that part of the country club."
Though the limit might initially seem small, he explained, "that limit is designed to supplement [the clubs] business income for up to six months until they can get their premises reopened.
Mr. Callaghan said it's still "early in the game, but there appears to be a lot of interest in the program."
Venture plans to extend the coverage throughout the hospitality industry to hotels, upscale restaurants and casinos, he said. Eventually it would be expanded into other industries such as technology and banking.
"This is a test case. It's not our primary target," he said. "We want to write enough business in the program to get a feel for whether people want it, and see if we can make money writing it."
Adding that future offerings depend on how the firms London partners decide to proceed, he said they would probably "move very carefully" before expanding the program into other areas.
"Our hope is that nothing ever happens," he said, referring to the possibility of airborne disease stemming from a terror attack. "Realistically, it's probably less likely that something will happen at a country club than a municipal building. Therefore, we felt we could introduce the coverage and fill a gap for a reasonable price," he said.
Reproduced from National Underwriter Edition, March 24, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.
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