• On 31 December 2019, the World Health Organisation (WHO) China Country office was informed of cases of pneumonia from an unknown cause detected in Wuhan City, Hubei province. Wuhan is the largest city in central China with a population of over 11 million people. On 7 January a novel coronavirus was identified as the causative virus by Chinese authorities.
  • On January 30 2020, the WHO declared the coronavirus outbreak a Global Public Health Emergency.
  • As at March 3 2020, there have been 90,870 confirmed cases and 3,112 deaths. The majority of cases (80,304) and deaths (2,946) have been in China, however there are confirmed cases in 72 other countries and 166 death outside of China (in the Philippines)
  • In Australia there has been 33 confirmed cases with 1 death recorded.

What is a Coronavirus

Coronaviruses are a large family of viruses found in both animals and humans. In humans, several coronaviruses are known to cause respiratory infections ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). The most recently discovered coronavirus causes coronavirus disease COVID-19.

What is COVID-19?

COVID-19 is the infectious disease caused by the most recently discovered coronavirus. This new virus and disease were unknown before the outbreak began in Wuhan, China, in December 2019.

How dangerous is it?

The most common symptoms of COVID-19 are fever, tiredness, and dry cough. These symptoms are usually mild and begin gradually. Some people become infected but don’t develop any symptoms and don’t feel unwell. Most people (about 80%) recover from the disease without needing special treatment.


Around 1 out of every 6 people who get COVID-19 become seriously ill and develops difficulty breathing. Older people, and those with underlying medical problems like high blood pressure, heart problems or diabetes, are more likely to develop serious illness. About 2% of people with the disease have died.


Insurance coverage

There are broad range of insurance policies available in the global market and each is unique with different terms, conditions and exclusions. In the context of this post we have focussed on the most common policies available and provided a general overview of the potential coverage position.

Property and Business Interruption (Industrial Special Risk)

These policies respond to physical loss or damage to insured property and resultant business interruption arising from a cause not other excluded. It is common for most standard policies to exclude Physical loss, destruction or damage occasioned by or happening though “disease”.

For business interruption coverage to apply, most policies require that the policyholder has suffered direct physical loss or damage from an insured peril.

Some policies contain a limited form of business interruption coverage for infectious or contagious disease, but in general this is subject to a relatively low sub-limit and restrictive terms. Generally the infectious or contagious disease must have manifested by a person whist at the policyholder’s premises or an outbreak occurring within the immediate vicinity of the policyholder’s premises.

Some policies can also contain endorsements or extensions for customer’s and supplier’s premises (i.e. inability to receive or supply), prevention of access (ingress/egress) or closure by a public authority which can potentially provide an element or cover.

Individual policies should be reviewed carefully, particularly the business interruption “trigger” which is generally always that the policyholder has suffered a “physical loss or damage” (which by definition would generally not include “disease”).

Even if some of the endorsements mentioned above are included there is likely to be a significant restriction in coverage with regards to infectious or contagious disease. In addition, for companies operating in Australia who have suppliers and or customer in China, there may not be coverage for loss of revenue by virtue of the policy’s “territorial limits” which apply Anywhere in Australia.

Corporate and Business Travel

Generally policies will not respond to a “known event” and also where the Department of Foreign Affairs (DFAT) and Smartraveller have issued a Travel Advice warning for Australians to¬†“DO NOT TRAVEL” into a particular country or region.

The following outlines the important date in relation to travel advice warnings that have been issued:

  • 24 January 2020 – DFAT 4 Do Not Travel – to Hubei Province in China issued
  • 30 January 2020 – World Health Organisation (WHO) declares COVID-19 as a Global Health Emergency of International Concern (i.e. A “known event”)
  • 1 February 2020 – DFAT 4 Do Not Travel – to China issued
  • 29 February 2020 – DFAT 4 Do Not Travel – to Iran issued


Generally if travel was booked and/or undertaken prior to any Travel Advice warning being issued, the policy would respond as per normal terms and conditions including overseas medical expenses or loss of deposits, cancellation expenses where a trip cannot be undertaken or has to be changed.

Most insurers have imposed a cut-off for cover on the basis that this is a “known event”.

CHUBB for example has advised their cut-offs is 5pm on 22 January 2020.

In this example;

  • For travel booked prior to the cut-off, the CHUBB policy will respond under normal terms and conditions
  • For travel booked after the cut-off, the policy may not respond to losses relating to this now “known event” with respect to travel cancellation, curtailment, disruption, lost deposits and/or political evacuation.

General Liability (Public & Products Liability)

General Liability policies respond to the policyholder’s legal liability to pay compensation to third parties for property damage or personal injury caused by an occurrence in connection with the business and/or products. It is not common for these types of policies to contain a specific disease exclusion, therefore it is possible for coverage to be available if a policyholder was found to be legally liability for causing or spreading the disease.

Workers Compensation

Whilst every State and Territory is different with regards to Worker’s Compensation legislation and extent of cover, generally any domestic worker who happens to contract the virus whilst in the course of their employment would be covered under the relevant workers compensation scheme for their State/Territory. Cover would be predicated on the basis it can be proven the virus was contracted during their course of employment (i.e. that is work was a contributing factor).

Marine Cargo/Goods in Transit

The outbreak of the virus has resulted in a number of different restrictions coming into place in relation to ships that originate from, or that have transited China, or which may have Chinese crew on board. Potential issues arising from this could include shipments being rejected, delayed, re-routed, cargo being quarantined etc. A common exclusion in Marine Cargo policies is loss caused by delay even though the delay may have been caused by an insured event.

Aside from the type of Marine Cargo policy that has been purchased, a key consideration in determining cover and liability will be the contract of carriage that is in place with the carrier or shipper.

Further Information

To discuss your specific situation and coverage under your insurance policies please contact your Account Manager today. For further information on COVID-19 and the DFAT Advice Levels please see the following websites:

Smart Travellers:

World Health Organisation (WHO):