Avian Flu Could Send Shipping Off Course

An outbreak of the avian flu virus could seriously disrupt the shipping industry, and there is little insurance protection available to help it through a pandemic, according to a report released from Aon Limited.

In its report, "Aon's Marine Insurance Market Review," the Chicago-based insurance broker's London office said: "The spread of disease has historically been more prevalent by sea than by air. An outbreak in a port could interrupt the supply chain with vessels in quarantine and crew trapped in an incubation cauldron. Ship, cargo and port managers must be aware of the precautions and plan for business continuity."

In a separate statement on the subject, Aon noted that aside from life and health insurance, there is little insurance protection for loss of business income resulting from a pandemic. That reality makes the need "for robust business continuity planning the top of the company board agenda," Aon said.

"The threat of a flu pandemic and the associated economic and social costs are very real," said Steve Allum, chairman of Marine Global Practice Group, in a statement.

Mr. Allum said a recent Aon "pandemic survey found that more than eight in 10, or 85.5 percent of companies view a possible influenza pandemic as a threat to their business, yet fewer than six in 10, or 57 percent, have put measures in place to protect themselves against such a risk.

"Companies operating in the marine sector can play an integral role in preventing the spread of a flu pandemic and therefore need to take precautions whilst carrying out their everyday business," advised Mr. Allum.

He went on to say that property and marine policies covering business interruption and extra expenses exclude losses resulting from the spread of infectious diseases. However, he continued, there are policies available that can provide cover.

"The current focus on avian flu should provide an opportunity, both for underwriters offering these solutions and for shipping companies concerned about the issue to protect their cash flow and reputation," added Mr. Allum.

Aon noted that while there have been no deaths from the flu in Europe, the shipping industry needs to be cautious of its potential exposure as the ships can carry migratory birds that perch on the decks of the ships. An infected bird can put both cargo and crews at risk.

Aon also noted two recent cases of ships being detained in the port of Piraeus, Greece, and Malta because of dead birds found onboard.

The incident in Piraeus was on Oct. 13, according to a Reuters news report. The Malta incident was also in October on a ship sailing from Taiwan, according to Reuters. No infections were found among the crews and tests came back negative in the Malta case.