Clarify virus coverage and communicate early, clearly and concisely, advise Airmic members

Risk managers must move quickly to explain to their bosses what coronavirus losses are covered, or not covered, by their insurance programme, according to Scott Feltham, group insurance manager at Compass Group, the UK-based multinational contract food service group. Mr Feltham advised fellow risk managers and Airmic members to particularly focus on business interruption (BI) coverage, which many non-insurance experts will assume covers losses related to the virus. But BI insurance will not usually respond without physical damage, unless a specific extension has been bought. So expectations among bosses and fellow managers need to be managed quickly and carefully, advised Mr Feltham in an article written for the Airmic website. “Covid-19 may be having a serious impact on an organisation’s ability to operate and generate revenue. As soon as this becomes apparent, it is incumbent on the organisation’s insurance/risk management team to assess the position regarding any available insurance coverage and begin managing the expectations of key stakeholders regarding the same,” Mr Feltham told Airmic News. The risk manager advised that if there is very little or no possibility of calling on BI cover, it is “imperative” this is clearly and concisely communicated. “This way, the organisation, business units etc will have clarity on where they stand early on into the pandemic and can begin taking measures to stem any impact while in full knowledge of the position from an insurance standpoint,” he said. Policyholders need to engage with their brokers and insurers as soon as possible to establish “absolute clarity” over how their insurances might respond to a pandemic. “As a collective, they should work through any ambiguity that might arise so that the insurance risk/management team can accurately convey the position to the organisation’s stakeholders,” added Mr Feltham. Tracey Skinner, director of insurance and risk financing at BT Group, and Matthew McEwan, director of risk management at Coca-Cola European Partners, also emphasised the importance of reviewing relevant insurance policies and communicating that to the business. “It is important to be reviewing key group and local risk financing programmes with a view to establishing affirmative coverage to the extent possible,” Mr McEwan said. Mr Feltham said that, more generally, insurance and risk managers should be assessing the ever-changing risk landscape their organisations face, to determine what key risks could have an impact on business continuity and their ability to generate revenue. “They should lean on their brokers for support in modelling the impact of certain key risks and, depending on the output, should work with their broker to consider what risk transfer solutions may be available. In addition, insurers need to refocus their attention on the changing risk landscape and make sure that the products they are offering are properly fit for purpose and add value to buyers of insurance in this day and age,” he concluded. Fiona Davidge, enterprise risk manager at the Wellcome Trust, one of the UK's largest providers of non-governmental funding for scientific research, told Airmic News that risk professionals should first ensure that the threat situation is being actively managed. “We activated our incident management team early in the situation so that we could both warm start contingency planning and, just as importantly, agree messages to staff who are understandably concerned about travel, meetings, hand hygiene etc,” Ms Davidge said. “We have focused on giving line managers useful information and risk assessment material to use with their teams. And we’re working with suppliers and partners to ensure they are providing enhanced input (cleaning, for example) and have their own plans,” she added. The Airmic member also said that risk professionals should be asking within their organisation whether departmental business continuity plans are up to date. The key departments involved will be business continuity, human resources, finance and technology, and they all need to work together, argued Ms Davidge. “Working together as an organisation is vital – what concerns one area is not what concerns another. We have had many debates about issues such as travel restrictions, how to handle staff who are off if schools close, for example. It is by consensus with a cross-organisational team that we have agreed the right way forward for our entity and staff,” she explained. Claire Combes, an Airmic board member and chair of the association’s Risk Management Steering Group, also told Airmic News: “Organisations should be reviewing and updating their business continuity plans and providing regular updates, even if it is just forwarding government advice.”

Clarify virus coverage and communicate early, clearly and concisely, advise Airmic members

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