The online version of this
release was modified slightly in June 2008 to
emphasize that the exclusion applies only to
first-party property losses.
Wheaton, Illinois, Nov. 7,
2006--The American Association of Insurance Services
(AAIS) is filing a new "virus or bacteria" exclusion
designed to exclude property losses that arise from viruses
and microorganisms
that can cause disease.
The exclusion, now being filed
countrywide under AAIS commercial lines and farm
insurance programs, was developed in light of the
possibility of a pandemic of avian flu. However, it
addresses contamination from any disease-causing
agent, including, but not limited to, SARS,
rotavirus, listeria, legionella, and anthrax.
Specifically, the endorsement
states that property coverage is excluded for loss, cost, or
expense caused by, resulting from, or relating to
any virus, bacterium, or other microorganism that
causes or is capable of causing disease, illness, or
physical distress.
In addition, the exclusion
explicitly applies to any loss, cost or expense
arising from denial of access to property because of
any virus, bacterium, or other microorganism.
The virus or bacteria exclusion
also states that, with respect to disease-causing
agents, it supersedes the terms of any other
exclusions, such as those addressing pollutants and
contamination, and coverage limitations, including
those addressing fungus and related perils.
"Property policies were never
intended to a source of recovery for losses arising
from organisms that cause disease," says Alma
Gordon-Smith, AAIS director of inland marine and one
of the developers of the virus and bacteria
exclusion.
"With the possibility of a
pandemic, there is concern over potential efforts to
create an avenue for loss payment where none was
originally intended."
AAIS is a national advisory
organization that develops policy forms and rating
information used by more than 600 P/C companies
throughout the U.S. The virus or bacteria
endorsement is being filed with a proposed effective
date of May 1, 2007 in most states under the
following AAIS programs:
For information on affiliating
with AAIS for use of its insurance line programs,
contact Rick Maka, director of marketing, at
rickm@AAISonline.com or by calling 800/564-AAIS.
