A re-think of claims involving notifiable diseases

As part of our commitment to our customers, we are constantly reviewing our policy wordings to ensure the cover we provide protects our customers against ever evolving risks. In this case study we look back at an incident that made us re-think our approach to notifiable diseases.

Our customer has operated a very profitable, 54 room hotel since 1991. Unfortunately, there was an outbreak of Norovirus which affected guests staying at the hotel over the Christmas period. A coach party from 2 different locations had booked to stay at the hotel. There were 80 guests in residence at the time. The first guest fell ill at approximately 09.00am on the 25th December 2017. A further four guests became ill during the course of the day and all were suffering from vomiting.

Our customer contacted the Environmental Health Department to notify them of the issues being experienced at the hotel - they were given advice but no directions to close the hotel.

Both coach parties vacated the premises on 28th December 2017 and our customer decided to cancel bookings for the next two days to carry out a deep clean of the hotel prior to new guests arriving for New Year’s Eve. The decision to close the hotel to undertake a “deep clean” was not made as a result of any action taken by the Environmental Health Officer or the Local Authority, as was required by our policy cover. So the strict position was that the customer’s business losses would not be covered.

On further investigation, we established that our policy wording had fallen out of step with other market wordings for similar products as it required that notifiable diseases had to be reported to the authorities, and for cover to operate, orders for closure by the Public Authority had to be given. This was flagged up to our management team and an early decision was made to accept the claim on an ex-gratia basis and review and amend our policy terms to remove the requirement that closure had to be officially ordered.

Our customer was delighted with this outcome as the incident had cost them business losses of £15,000. But, more significantly, the broker concerned had a significant book of hotel business and would not have been able to sustain their business without a different approach and revised policy terms.

This is just one example of how we are constantly looking to protect people from the worst happening and put it right if it does.

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