The American Association of Insurance Services, an advisory organization to the property-casualty industry, is filing a new "virus or bacteria" exclusion designed to exclude losses that arise from organisms that can cause disease.
The exclusion, now being filed countrywide under AAIS commercial lines and farm insurance programs, was developed in light of the possibility of a pandemic from the avian flu. However, it addresses contamination from any disease-causing agent, including but not limited to SARS, rotavirus, listeria, legionella and anthrax.
The endorsement states that coverage is excluded for loss, cost, or expense caused by, resulting from, or relating to any virus, bacterium, or other microorganism that causes or is capable of causing disease, illness, or physical distress.
In addition, the exclusion explicitly applies to any loss, cost or expense arising from denial of access to property because of any virus, bacterium, or other microorganism.
The exclusion also states that, with respect to disease-causing agents, it supersedes the terms of any other exclusions, such as those addressing pollutants and contamination, and coverage limitations, including those addressing fungus and related perils.
"Property policies were never intended to be a source of recovery for losses arising from organisms that cause disease," said Alma Gordon-Smith, AAIS director of inland marine, who helped develop the exclusion, in a statement. "With the possibility of a pandemic, there is concern over potential efforts to create an avenue for loss payment where none was originally intended."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.