Coronavirus Risk Advisory Alert: Latest Updates
Fears of the newly discovered novel Coronavirus disrupting travel and commerce and slowing down economic growth have spooked global risk markets. It has already hit Asian stocks hard, depressing copper and oil prices, driving investors into safe havens like the U.S. Treasury and German bunds.
On January 21st, 2020, China officially acknowledged that the coronavirus, which can have flu or pneumonia-like symptoms, was spreading from human to human. Most commonly, the virus is spread through the air by coughing and sneezing. Close personal contact as well as touching an object or surface with the virus and then touching your mouth, nose or eyes can also cause the infection to occur. In rare cases, the virus can spread through fecal contamination.
The virus, which is believed to have had its first transmissions at a wholesale seafood market in Wuhan, has afflicted more than 500 people and resulted in a total of 17 deaths, at the time of publication.
The virus has spread to half a dozen other countries and territories, including the United States. Hong Kong too has reported more than a 100 suspected cases, while public health authorities in the United States, Singapore and other countries are stepping up screening of passengers travelling from Wuhan to stem the spread of the virus.
This outbreak echoes back to SARs, which afflicted more than 8,000 people worldwide and killed 299 people in Hong Kong in 2003.
Threat to Businesses
Infectious diseases have always been a threat to businesses but modern travel, mass migration, and medical protocols such as overuse of antibiotics causing microbial resistance have greatly changed the overall outcome of infectious disease events.
It is critical to update and expand your organisation’s crisis management and business continuity plans to protect your employees, customers, supply-chain contacts, stakeholders, and business assets against modern-day pandemics.
History may not repeat itself this time around, with governments across the world making significant early interventions to avoid a SARS-like situation. However, a mass viral outbreak will inevitably affect places of work.
Inadequate communicable-illness policy and response plans will only exacerbate the repercussions of an infectious disease event on productivity, stress among the workforce, business continuity, and even liability.
Too many organisations adopt a wait-and-see response to outbreaks of infectious diseases until it’s too late. Early efforts at cooperation, collaboration and investment can help you ensure a safe work environment for employees, customers, and clients.
To protect employee and customer safety while minimising adverse economic impact on your business, we suggest considering the following steps:
- Assess and review all current Human Resource policies relating to absenteeism, payroll, healthcare, and disability, and make policy and programme decisions relative to an infectious-disease outbreak.
- Establish a quick process to identify who takes charge at operational locations to oversee a crisis management plan and local employees.
- Establish or review protocols for quickly contacting employees and customers at the time of the outbreak.
- Establish or reconfirm protocols to contact local public health and public safety agencies (where applicable).
- Understand their potential impact on your operations (could they enforce a closure).
- Ensure that communication lines remain open both ways. In the case of the corona virus, disseminate information on simple precautions to stop the spread of the infection, using these four simple steps:
- Keep your hands away from your eyes, nose and mouth to prevent germs
- Wash your hands often with soap and water or with an alcohol-based
- Avoid close contact with sick people
- Wear a surgical mask to prevent transmission of airborne germs
- Review and evaluate remote working policies and capabilities.
- Develop and test a medical or wellness plan that includes vaccinations, antiviral medicines, exposure reduction or avoidance, and education of employees.
- Understand the legal ramifications if your organisation is labelled “critical infrastructure” and you have special responsibilities, which you may not be able to perform.
- Review and test your business continuity plan with an emphasis on employees, customers, alternative suppliers, and third-party services.
Previous infectious disease outbreaks (for example, Ebola, Zika, SARS) have highlighted the financial impact on organisations in two distinct ways:
- Organisations can suddenly find themselves subject to a government order enforcing strict quarantine measures, similar to the measures taken in Wuhan, China at the moment. This can cause significant business interruption as organisations are forced to cease operations for an extended period of time or operate below capacity due to impact on their workforce, customers or suppliers.
- Organisations operating in B2C industries, particularly in the hospitality and retail space can experience a steep decline in the number of customers as people minimise their movements and international travel in an effort to reduce their exposure to infection.
These financial impacts fall under the insurable risk category of “non-damage business interruption,” where organisations’ revenue streams suffer a downturn, without any physical first-party property loss.
Solutions are available in the insurance marketplace that help organisations limit the adverse economic impact of pandemic events and disease outbreaks as well as policies that can provide expert crisis assistance to ensure optimal loss mitigation during a live event. These products are tailor-made to events such as this current outbreak and offer the insured much needed liquidity and crisis management support.