COVID-19 and Insurance in 2020-21 | News/Blogs

COVID-19 and Insurance in 2020-21

Basic advice in relation to the management of corporate and local government insurance in 2020-21

Insurers will be asking for far more information than they previously have. This includes questions about the impact COVID-19 will have and or has had on your business. They will require detail on your Business Continuity Plan (BCP) and whether it has been successfully implemented. You may need to outline any additional loss controls your organisation has implemented and the current risk management measures that are being utilised.

 

The renewal process will a take longer than normal as organisations will need to gather additional information and enter into discussions remotely. We suggest commencing your next renewal way ahead with renewal strategy discussions to begin at least 6 months before due date.

 

General Liability

Insurers will expect specific details on how organisations are identifying, and mitigating risks associated with COVID-19 with an aim to gain a detailed understanding of procedures around cleaning, sanitisation, customer interaction and social distancing policies etc.

 

Directors & Officers Liability

The COVID-19 outbreak is affecting the risk of litigation against Directors and Officers as potential plaintiffs scrutinise the way the board manages the company through the current health crisis. The majority of class action lawsuits for Australian companies are likely to focus on alleged mishandling of insolvency procedures.

 

Trade Credit Insurance

Trade Credit insurance is under significant pressure as a result of COVID-19. We are witnessing the global shutdown of the movement trade, people and capital causing disruptions to companies’ supply chains, impacting their ability to obtain financing and significant declines in revenues.

 

Cyber Liability Insurance

Cyber criminals and state actors are taking advantage of the disruption and uncertainty and are launching cyber-attacks on remote workers at home and on supply chains.

 

Industrial Special Risks

The key in considering Business Interruption is to review historic revenue and profit trends and clearly catalogue in forensic detail what this means for future forecasting/trending. This will allow you to articulate the go-forward position to insurers and discuss necessary changes to policy limits, indemnity periods etc.

 

It will critical that insured values are accurate both in terms of property damage and revenues/profit, and that the current conditions and subsequent recovery are factored in.