Share this Mister Wong Digg Del.icio.us Slashdot Furl Yahoo Technorati Newsvine Googlize this Blinklist Facebook Wikio Hear this text Print E-mail Tags south fern risk cover establishments leisure global 2010 african world africa visitors travelling fever hotel foreign abroad businesses cancel disease Taryne Eastwood

ALEXANDER FORBES RISK SERVICES

12 January 2010  

Global epidemics like bird flue and swine flue, along with an increase in the incidence and spread of a host of other conditions, have forced insurers to take a more inclusive view of risk and liability – especially as South Africa approaches the 2010 FIFA World Cup.

The World Cup will see South Africa receiving visitors from many countries where meningitis, Congo fever, Rift Valley fever, yellow fever and hepatitis are endemic and large portions of their populations carry these diseases. As such “businesses, governments and especially the leisure industry need risk management plans that address the consequences of pandemics or even normal disease spread” says Riette Fern, Executive Leader: Strategic Accounts, Alexander Forbes Risk Services.

If your company has people placed around the world, or regularly receives foreign travelers, you face a real risk of suffering loss or litigation as a result of disease outbreaks – regardless of whether you are directly involved.  

Most existing cover, however, only insures against incidents happening on or near a businesses immediate premises. For example, if “500 Americans cancel a conference at your hotel in Johannesburg because of an epidemic in New York you will most likely not be covered, especially if they cancel because of fear of flue rather than being prevented from travelling by law” explains Fern.

As such, global epidemics, or even standard cases of infection, makes cancellation the biggest risk for the South African leisure industry in 2010. And “if you end up with an empty hotel during the world’s biggest sports event you have no recourse against FIFA” adds Fern.  

While most establishments will have cover from the South African Special Risks Insurance Association (SASRIA) this only pays out in the event of physical damage, like theft, riot or natural disaster. If illness breaks out at a few hotels in Johannesburg causing people to cancel their trip “even though nothing happened at your hotel, SASRIA will not compensate you for any cancellations” explains Fern.  

Also, most leisure establishments in South Africa are insufficiently covered for the cost of disease-related claims from foreign visitors or the costs associated with caring for sick staff abroad. For example, “if an expensive Italian soccer star falls ill or dies in your bush camp would your standard liability cover meet the cost of a European claim?” explains Fern.

Similarly, if an employee falls ill while travelling abroad would their South African medical aid cover them for a three week sojourn in an intensive care unit in a London hospital?

To meet the liability challenges facing South African government departments, international businesses and leisure establishments, Fern recommends two types of cover to deal with epidemic risk and infection:

•    A general business interruption cover providing compensation in the event of mass cancelation due to events that have happened elsewhere,
and,

•    A cover for individuals in the employ of global businesses, government departments or leisure establishments, covering costs that may arise from individual employees travelling abroad or foreign visitors to local establishments. 

This combination will ensure that “businesses and their personnel are sufficiently covered to deal with the consequences of global epidemics or even localised infections should these cause mass cancellations or any other claims associated with the FIFA 2010 World Cup” concludes Fern.

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