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 by Aon Ltd.
"The spread of disease has historically been more prevalent by sea than by air," said the broker's London office in its report, "Aon's Marine Insurance Market Review."
"An outbreak in a port could interrupt the supply chain with vessels in quarantine and crew trapped in an incubation cauldron," Aon warned. "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 coverage, 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," according to Steve Allum, chairman of Marine Global Practice Group, in a statement.
Mr. Allum said a recent "pandemic survey" by Aon 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 while carrying out their everyday business," he advised.
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 coverage.
"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 avian flu in Europe, the shipping industry needs to be cautious about its potential exposure as ships can carry migratory birds that perch on their decks, putting both cargo and crews at risk.
Aon also noted two recent cases of ships being detained this past October in the ports of Piraeus, Greece, and Malta because of dead birds found onboard.
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