COVID-19 CLIENT ADVISORY

The implications of COVID-19 on individuals, businesses and economies is changing at an exponential rate. And whilst there will be a host of unusual and unique challenges, Frontline is committed to helping you get through this period with as little loss and inconvenience as possible. As such, we have a COVID-19 task team in place to ensure that we are able to address this dynamic nature of this outbreak and assist our clients in whatever way possible.

Frequently Asked Questions (FAQ’s)
These FAQ’s will be added to the website for future reference.

Q: If I have Business Interruption cover, does my policy cover me against losses my business may incur owing to interruptions caused by the COVID-19 outbreak?
Business Interruption cover is there to provide cover against losses clients may suffer as a result of their businesses being interrupted following an event for which they have bought cover, such as a fire, earthquake or storm. This means that there is generally no cover against business interruptions caused by uninsured events, such as an economic crisis or a viral pandemic. This is not unique to specific policies and is the norm on general short-term insurance policies across the world.

A policy may have an extension to the Business Interruption section that provides cover for losses arising from “Prevention of Access / Denial of Access” – the above applies to this cover extension as well in that it, too, needs to be caused by an insured event resulting in damage to your property.

Q: What insurance-related business continuity measures should one consider during this crisis?
You may be facing the situation where you need to consider cost reduction measures in order to ensure that your business can survive this pandemic. Although insurance is often the first to go, we would caution against cancelling all your insurance covers. If you temporarily suspend your operations, you will still have insurance risks and exposures that would need to remain covered. Please contact your Insurance Advisor to discuss the structuring of your insurance portfolio and your insurance needs during this time.

Initiatives that need to be under discussion include, but are not limited to, the following:

• Working to identify the risks and covers that will not be applicable or appropriate during this shutdown or slowing of trade.
• Revision of motor portfolio – vehicles parked and not in use may be able to have cover altered to Third Party, Fire and Theft as opposed to Comprehensive.
• Potentially remove or change to declaration basis those items, such as stock, which will give immediate relief without exposing the client in the long run.
• Reviewing rates wherever justified and possible.
• Reviewing forecasts of Turnover and Fee income, as these will all affect the premium calculation of covers.

Please note that the above are examples and we cannot guarantee that all of these options will be possible.

Q: What about all the cancellations that I am receiving from my Customers?
Many of the queries that we have received relate to loss due to customers cancelling orders as a result of the pandemic. In order to minimise losses, we advise you to review your own cancellation conditions in your contracts with your customers in order to establish if you are required to refund.

Q: Does my insurance cover Force Majeure?
A "force majeure" clause (French for ‘superior force’) is a contract provision that relieves the parties from performing their contractual obligations when certain circumstances beyond their control arise, making performance inadvisable, commercially impracticable, illegal, or impossible. This clause may well be in your clients contracts with agents / buyers and if they activate same, it would typically mean you are obliged to refund deposits / payments in full. This is a contractual matter and not an insurance matter. There is no cover and you should consult your legal advisor in this regard.

Q: How does insurance respond to a National Shutdown?
A direct order by Government to shut down your operation, is not covered by short term insurance policies. Historically, other countries have seen government release funds to ease the financial exposure of those affected however, there are no guarantee’s this will take place. We encourage you to advise clients to take steps to mitigating financial loss during this crisis.

Q: What are my legal obligations during this outbreak?
We have received queries from Brokers relating to legal rights and obligations. However, due to the fact that we are not legal advisors, we are unfortunately not able to advise our clients in this regard. We would recommend that you contact your legal advisor for any queries of a legal nature.

PLEASE NOTE: THE ABOVE SERVES MERELY AS A BASIC GUIDELINE. IN ALL INSTANCES, CONSULT WITH AND BE GUIDED BY YOUR BROKER IN SUCH MATTERS.