Precaution against Sars - or is that flu?

A report in the Strait Times has suggested the "business interruption" clause in a number of policies does not include infectious diseases, making it difficult for firms affected by the virus to recover lost funds.

Worse still, companies looking to upgrade their policies could be disappointed.

A number of insurers in the region are reportedly 'wary' of now adding the disease to their coverage.

Limited cover

Business interruption plans typically protect companies against loss of profits arising from damages caused by fire.

So businesses such as restaurants will not have to foot the bill for something such as a mass quarantine order.

Before the Sars epidemic erupted, a number of insurance firms offered an infectious disease extension without any extra charge.

Those days are long gone and it seems insurance groups are now not keen to provide the top-up, even for companies willing to pay substantial premiums.

All clear?

The Strait Times suggested Axa Insurance had ceased offering such an extension to new accounts and would consider any claims on a 'case-by-case' basis.

Other insurers, including Tenet Insurance, Asia Insurance and NTUC Income are reportedly offering "selective" coverage to new and existing policies.

The report points out that its own parent company, Singapore Press Holdings, "does not need to scramble for such an extension" as its "industrial all-risks plan" covers business-interruption loss arising from infectious diseases.

However, the report came as Singapore's prime minister Goh Chock Tong said on Friday a new cluster of suspected Sars cases appeared to be influenza.

If this proves to be the case, Singapore would be on track to be declared free of the deadly virus by the World Health Organisation (WHO) by Sunday.