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Law360, London (March 5, 2020, 2:51 PM GMT ) The U.K. government has said it will declare the new coronavirus a "notable disease" so businesses can claim for losses in England from insurance firms.
The formal classification is required by many insurance firms and will help companies seek compensation through their policies in the event of any losses they make as a result of the spread of COVID-19, the Department of Health said Wednesday.
The declaration places a legal responsibility on medical professionals to tell health officials of suspected cases immediately. Elsewhere in the U.K., the Scottish and Northern Ireland governments formally declared that the new coronavirus was "notifiable" last month.
The Association of British Insurers has warned the decision is unlikely to apply retroactively. ABI urged holders to check the small print of their policies.
"Standard business insurance policies are designed and priced to cover standard risks, not those that are very unlikely, such as the effects of COVID-19," the ABI said in a statement Wednesday.
Separately, Prime Minister Boris Johnson announced Wednesday that emergency legislation will be introduced to deal with the outbreak that will see employees paid "from the very first day" they are signed off as a result of the virus.
Johnson said that the government will take "every step" to make sure nobody is "penalized for doing the right thing" by self-isolating.
On Tuesday Insurer Direct Line said it has so far received more than £1 million ($1.26 million) in travel insurance claims as thousands rush to cancel vacations in the wake of the COVID-19 outbreak.
Meanwhile specialist insurer Hiscox said it had started receiving claims from the coronavirus outbreak on travel insurance, as well as event-cancellation insurance.
Law firm Horwich Farrelly warned on Tuesday that the virus could trigger an "epidemic" in travel insurance sickness claims, many of which are speculative and potentially fraudulent.
"History tells us that it will only be a matter of time before claims management companies and solicitors alike jump on the coronavirus bandwagon and start advertising for claims," said David Scott, partner at Horwich Farrelly. "Indeed, there are already a few firms of solicitors suggesting that people can be compensated if they become infected while abroad."
Scott said that while it may be possible to claim against a tour operator or hotel if people are infected abroad, it would be "incredibly tough" to do so successfully.
Travel insurance providers have in recent years been battling against rising fraud in gastric-related sickness claims. The Association of British Travel Agents said last year the emergence of claims management companies operating in the sector had driven up claims by 500% over the past three years.
--Additional reporting by Martin Croucher. Editing by Rebecca Flanagan.
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