{"id":2330,"date":"2020-03-06T10:56:59","date_gmt":"2020-03-06T10:56:59","guid":{"rendered":"http:\/\/insight.thomsonreuters.com.au\/?p=2330"},"modified":"2022-08-03T16:03:51","modified_gmt":"2022-08-03T05:03:51","slug":"coronavirus-and-travel-insurance-exclusions-discussing-a-pandemic-claims-response-strategy","status":"publish","type":"post","link":"https:\/\/insight.thomsonreuters.com.au\/legal\/posts\/coronavirus-and-travel-insurance-exclusions-discussing-a-pandemic-claims-response-strategy","title":{"rendered":"Coronavirus and Travel Insurance Exclusions: Discussing a Pandemic Claims Response Strategy"},"content":{"rendered":"\n

Authorities are taking no chances with the coronavirus outbreak. In fact, it seems that only thing spreading faster than coronavirus is the anxiety associated with it. <\/h4>\n\n\n\n

Airlines are suspending flights and routes, EmTech Asia 2020 has been postponed, Fashion Week Milan has gone online, the Louvre and Tokyo Disneyland have closed their doors and even the Cherry Blossom Festival in Japan has been cancelled. It is inevitable that claims for travel plans disrupted by the outbreak will soar but how will the current policies and insurers cope with the influx? Legal Insight<\/em> spoke with Jessica Tat, author of Motor Vehicle Law NSW<\/a><\/em> and Elizabeth Esber, who are both Barristers prastising in commercial and insurance litigation, about travel insurance, exclusions and coronavirus (COVID-19).<\/p>\n\n\n\n

Challenges posed by the current terminology of exclusion clauses<\/h2>\n\n\n\n

Exclusions are a standard and\nnecessary part of any insurance policy, defining the limits of coverage for\nrisks an insurer is unwilling to insure. However, exclusions are often phrased\nin vague terms with few warnings as to when or how the exclusion may be affected.\nAs Jessica and Elizbeth note, these clauses \u201ccan be interpreted widely and in\nvarying ways depending on the factual matrix of each claim\u201d. With the status of\nCOVID-19 in almost constant flux, \u201cwe are seeing not only new circumstances\narising each day but an increase in the number of people affected; and\ndifferent circumstances in which people might seek to rely on their travel\ninsurance\u201d. As a result, insurers will face significant challenges as:<\/p>\n\n\n\n

\u201c[c]laims processes and procedures that may have been appropriate for responding to foreseeable circumstances\/claim events may now be under stress because there is a large number of claims and, the facts of each may give rise to unanticipated circumstances such as mass cancellation of events in cities where there are no reported local outbreaks. Stretched resources may result in inconsistent assessment and decision making between claims.\u201d<\/p>\n\n\n\n

RELATED:<\/strong> Coronavirus and Bushfires Rekindle Interest in \u2018Force Majeure\u2019<\/a><\/p>\n\n\n\n

The application of pandemic exclusion clauses post-Hayne<\/h2>\n\n\n\n

The World Health Organisation\n(WHO) has declared COVID-19 to be a public health emergency of international\nconcern and in the wake of the Hayne Royal Commission, \u201cthe application of\nexclusion clauses [needs to be] informed by a broader claims philosophy and\nprocedure which facilitates efficient, honest and fair determination and claim\noutcomes\u201d said Jessica and Elizabeth.<\/p>\n\n\n\n

\u201cWhile the WHO declaration may\nform part of the context in which an insurer assesses a claim, the actual\nimpact will depend on the wording of each policy and how that WHO declaration\nfeatures in that particular policy, if at all. In addition to interpreting any\nexclusion terms specific to a pandemic\/epidemic event, insurers should also consider\nwhether their policy(ies) contain other general or specific exclusion terms\nthat may impact or inform the construction of the pandemic\/epidemic exclusion\nterm that the insurer seeks to rely on\u201d.<\/p>\n\n\n\n

Jessica and Elizabeth also point out that it is the consistency in how claims are determined that would \u201cassist insurers with maintaining its level of service to policyholders, as well as in achieving efficiency, honesty and fairness\u201d.<\/p>\n\n\n\n

Immediate solutions for determining claims for travel disrupted by COVID-19<\/h2>\n\n\n\n

Jessica and Elizabeth argue that priority\nshould be given to the establishment of a Pandemic Claims Response Strategy\n(PCRS) to address:<\/p>\n\n\n\n