Wednesday, July 26, 2006



From The Courier Mail :

INSURANCE companies have started writing bird flu clauses into their travel policies to protect them from massive payouts if a pandemic hits.

The clauses mean Australians insured under such policies will not be covered if they contract avian influenza while travelling.

They are similar to those written into policies after the 2001 September 11 attacks protecting insurance companies against payouts in the event of a terrorist act.

A travel insurance policy issued by Vero Insurance Ltd states the company will not pay for: "Claims . . . arising from avian influenza (including the H5N1 strain) or any derivative or mutation of such viruses, or the threat or perceived threat of any of the above."

The policy is effective from July 1.

Fears about the possibility of a pandemic have been gathering momentum since confirmation of the first human-to-human transmission of the H5N1 strain of the virus in Indonesia late last month.

Genetic sequencing of a virus sample taken from a 10-year-old boy who died from avian flu showed a minute change that was also found in a sample taken from his infected father, proving H5N1 had moved from one human to another.

However, experts say there is no evidence the virus is moving easily from human to human. So far this year, the World Health Organisation has confirmed 55 people have died from avian flu, compared with 41 in 2005.

Most cases have involved people contracting the virus from close contact with domestic birds.

Since 2003, 229 people have been infected with H5N1, with 131 of them dying.

The Federal Government's latest influenza pandemic business continuity guide warns that standard insurance policies will not generally cover a company's financial losses associated with a pandemic.

Such policies often contain force majeure, or natural disaster, clauses to protect insurers from incurring excessive liabilities.

However, the Government's guide suggests a few adverse impacts of a pandemic may be covered under some policies.

"Self-employed people may be able to obtain Business Overheads Cover, which covers regular fixed operating expenses of the business if the individual becomes sick," the guide says.

"In addition, companies can take out Key Person Insurance, which provides death and/or disability cover in relation to an individual who is critical to business operations.

"Companies can also insure against events such as suppliers failing to deliver vital production inputs, or fuel prices rising unexpectedly. Businesses may also wish to consider taking out Loss of Profit Insurance."

An Insurance Council of Australia spokesman warned businesses who wanted to try to protect themselves in the event of a pandemic to carefully read the product disclosure statement of their insurance policies before signing.

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