Some Business Interruption Cover May Apply To Flu, Says Expert

NU Online News Service, May 1, 2:51 p.m. EDT

A legal expert examining insurance implications from possible swine flu impact said under some circumstances business interruption policies may provide coverage.

Steve Gilford, a partner with Proskauer Rose law firm, said he has been advising insurance clients and brokers on what the coverage implications might be if the influenza epidemic turns into a more serious problem.

"There are a number of aspects people should be looking at if there are direct economic consequences. We're talking to people about examining their property and business interruption policies to see the extent of coverage for a closure, quarantine, or supply-train disruption," he said.

Mr. Gilford noted that policies often cover business interruption caused by property damage, but "if there is [viral] contamination of a site that isn't explicitly excluded by a policy, that may be covered."

He noted there are also policies that cover civil authority restrictions on access that don't require physical damage.

Mr. Gilford advised that risk managers need to be aware of what coverage they have so if a claim arises, they are prepared to give notice to their insurers without having notice problems arise.

He said the flu epidemic may have impact on event cancellation policies, as functions are curtailed to avoid public gatherings.

In addition, he said "there may well be liability issues" if some organization was responsible for exposing a person to the flu.