As the global situation of the spread of the COVID-19 virus deteriorates, most multinational conglomerates are pursuing professional advice on the pandemic insurance policy.
Many corporations in Malaysia are now taking guidance on contingency planning on how to reduce their financial risks, while their economies are harmed on threatened by the extremely infectious coronavirus that has affected China and more than 100 countries. Actually, not many foreign corporations in the world have acquired disease or pandemic insurance plans. Most corporations that have taken up such expensive insurance covers are from the Fortune-500 global conglomerates. And even so, there are not many of such policy takers.
However, it may be “too late and too costly” for companies to take account of the Covid-19 outbreak or pandemic policies right now, but there are avenues to minimize existing and potential financial risks.
Companies are strongly being advised to continue protecting the future as the environment gets increasingly linked to globalisation. We would also encourage them to review and improvise their Business Continuity Plan (BCP) so we will guide them with the whole planning and approaches of their business continuity plan.
They would require a tailored plan for future financial risks in the case of a pandemic catastrophe, because their activities are somewhat specific and the trigger points for insurance premiums the be specific.
The trigger point may be at the height, at the end of the crisis, or when the business realizes it’s about to face the cash flow issue. That has to be set down in the insurance contract.
While to SME & SMI businesses, we often provide advice and encourage them to ask the banks for deferring repayment of loans. At the same time, they will also begin looking at BCP in order to mitigate any emerging risks.
This current pandemic situation has also warned businesses to learn more about diseases and to focus on educated decisions now. Meanwhile, insurance companies need to think beyond the traditional trade process and coverage. Companies should be engaged with their suppliers and customers in the current situation. If they do so early, they will have better cash flow to stay afloat and ensure employees are safe.
Organizations are unable to avoid a pandemic outbreak; however, they should be equipped to react, remediate, and recover. According to the study of ‘Pandemic Readiness: Risk Management and Mitigation Strategies’, the sectors outlined as needing to take early action were: hospitality and hotels, hospitals, retail and transport, shipping and education.
In conclusion, companies from various economic markets / sectors need to control their own threats through coordinating their reactions to safeguard their people and financial credibility with two important steps: –
Firstly, companies will continue to create alertness plans that include emergency planning, corporate sustainability, disaster management and disaster communication. Plans will therefore be in motion to start functioning in the case of transportation bans even where organisations are specifically impacted.
Secondly, companies can consider how current insurance plans will react to a pandemic and undertake the required improvements to their strategies, keeping in mind the possibly global existence of the numerous diseases.