LMA5396: Communicable Disease Exclusion for liability policies

August 2, 2020 by Stephen Tomlinson

Analysis of LMA5396

About LMA5396

Drafted by the Lloyd’s Market Association (LMA) and released in April 2020, LMA5396 is a communicable disease exclusion for use on liability policies.

Clause 1: the ‘Communicable Disease’ exclusion

At its broadest, LMA5396 excludes liability and costs ‘in connection with’:

a Communicable Disease; or
the fear or threat of a Communicable Disease.

Because all that is required between the loss and Communicable Disease is a ‘connection’, the Communicable Disease may not need to be a cause of the loss for the exclusion to apply. The breadth of the exclusion is also demonstrated by the anti-concurrent causation phrase ‘regardless of any other cause contributing concurrently or in any sequence’ in clause 1.

Clause 2: clarification of exclusion

Clause 2 of LMA5396 clarifies that the exclusion of clause 1 includes costs to clean-up, detoxify, remove, monitor or test for a Communicable Disease. While this may seem straightforward, there is a distinction between:

a pathogen which causes a disease; and,
a disease, which is a condition that affects an organism.

Strictly speaking, it would not be possible to ‘clean-up’ or ‘detoxify’ a disease. Furthermore, to ‘remove’ a disease would require the organism to be physically removed from a location. However, ‘monitoring’ or ‘testing’ for a disease is feasible, since this would simply require testing persons (or other organisms) to determine if they have the disease.

Clause 3: definition of ‘Communicable Disease’

In clause 3 of LMA5396, ‘Communicable Disease’ is defined as ‘any disease which can be transmitted… from any organism to another organism’. Requiring the disease to be transmissible between organisms does qualify the scope of the definition; food poisoning, for example, would not be excluded as a ‘Communicable Disease’ because it is transmitted by the ingestion of contaminated food or water, not by a pathogen that is transmitted between organisms.

Beyond this,

sub-clause 3.1 inclusively identifies types of pathogens;
sub-clause 3.2 inclusively identifies means of transmission; and,
sub-clause 3.3 identifies possible effects of the disease or pathogen.

None of these sub-clauses, however, are essential to the operation of the endorsement.

LMA5397: Communicable Disease Exclusion for power generation, construction and engineering policies

August 2, 2020 by Stephen Tomlinson

Analysis of LMA5397

About LMA5397

Drafted by the Lloyd’s Market Association (LMA) and released in April 2020, LMA5397 is a communicable disease exclusion for use on power generation, construction and engineering policies.

Clause 1: the ‘Communicable Disease’ exclusion

At its broadest, LMA5397 excludes loss ‘in connection with’:

a Communicable Disease; or
the fear or threat of a Communicable Disease.

Because all that is required between the loss and Communicable Disease is a ‘connection’, the Communicable Disease may not need to be a cause of loss for the exclusion to apply. The breadth of the exclusion is further demonstrated by the words ‘regardless of any other cause contributing concurrently or in any other sequence thereto’ in clause 1.

In clause 2 of LMA5397, ‘Communicable Disease’ is defined as ‘any disease which can be transmitted… from any organism to another organism’. Requiring the disease to be transmissible between organisms does qualify the scope of the definition; food poisoning, for example, would not be excluded as a ‘Communicable Disease’ because it is transmitted by the ingestion of contaminated food or water, not by a pathogen that is transmitted between organisms.

Beyond this,

sub-clause 2.1 inclusively identifies types of pathogens;
sub-clause 2.2 inclusively identifies means of transmission; and,
sub-clause 2.3 identifies possible effects of the disease or pathogen.

None of these sub-clauses, however, are essential to the operation of the endorsement.

LMA5398: Infectious or Contagious Disease Exclusion

August 2, 2020 by Stephen Tomlinson

Analysis of LMA5398

About LMA5398

Drafted by the Lloyd’s Market Association (LMA) and released in May 2020, LMA5398 is a communicable disease exclusion for UK consumer and commercial property risks.

LMA5398 exclusion

LMA5398 excludes loss or damage that is ‘in any way caused by or resulting from’:

infectious or contagious disease;
any feat or threat of infectious or contagious disease; or
any action taken to minimise or prevent the impact of an infectious or contagious disease.

Significantly, the words ‘in any way caused by or result from’ have the effect that the exclusion only applies where the listed items are an actual cause of loss, whether the proximate or remote cause.

Definition of ‘infectious or contagious disease’

The second sentence of LMA5398 defines ‘infectious or contagious disease’ as any disease capable of being transmitted from an organism to another organism. Strictly speaking, however, it is pathogens which are transmitted between organisms and pathogens which cause diseases (since the disease is the condition that affects the organism).

LMA5500: Infectious or Contagious Disease Exclusion during a PHEIC

August 2, 2020 by Stephen Tomlinson

Analysis of LMA5500

About LMA5500

Drafted by the Lloyd’s Market Association (LMA) for use on consumer and commercial Accident/Accident & Illness policies, LMA5500 is an infectious or contagious disease exclusion which is triggered by a Public Health Emergency Of International Concern (PHEIC).

LMA5500: the exclusion

Clause 1 of LMA5500 excludes claims that result from an outbreak of an ‘infectious or contagious disease’ that has been declared a PHEIC by the World Health Organization (WHO).

What is a PHEIC?

Under the International Health Regulations (2005), a Public Health Emergency Of International Concern (PHEIC) is defined as “an extraordinary event which is determined to constitute a public health risk to other States through the international spread of disease and to potentially require a coordinated international response”. This definition implies a situation that is:

serious, sudden, unusual or unexpected;
carries implications for public health beyond the affected State’s national border; and
may require immediate international action.

To date, there have been six PHEIC declarations:

the 2009 swine flu declaration;
the 2014 polio declaration;
the 2014 Ebola declaration;
the 2016 Zika virus declaration;
the 2019 Kivu Ebola declaration; and,
the 2020 COVID-19 declaration.

LMA5500 is therefore only likely to exclude particularly serious diseases.

LMA5500: Clauses 2 and 3

Clause 2 of LMA5500 states that the exclusion of Clause 1 shall apply to claims made:

after the date of the PHEIC declaration; and,
where the disease has been diagnosed by a qualified medical practitioner prior to such declaration.

Clause 3 states that the exclusion shall apply until the WHO ‘cancels or withdraws any relevant PHEIC’. These words are not entirely accurate since the WHO cannot cancel or withdraw a PHEIC, but the WHO can declare that a PHEIC no longer exists. For an example of such a declaration, see Fifth meeting of the Emergency Committee under the International Health Regulations (2005) regarding microcephaly, other neurological disorders and Zika virus.

LMA5500: definition of ‘infectious or contagious disease’

In Clause 4, LMA5500 defines ‘infectious or contagious disease’ as ‘any disease capable of being transmitted from an infected person, animal or species to another person, animal or species by any means’. Strictly speaking, however, it is pathogens which are transmitted between organisms and pathogens which cause diseases (since the disease is the condition that affects the organism).

LMA5501: Political Risk Communicable Disease Exclusion

August 2, 2020 by Stephen Tomlinson

Analysis of LMA5501

About LMA5501

Drafted by the Lloyd’s Market Association (LMA) and released in May 2020, LMA5501 is a Communicable Disease exclusion for political risk insurance. Generally, political risk insurance is used to cover infrastructure developers, importers, exporters and other companies against financial loss resulting from political instability.

LMA5501 exclusion

At LMA5501 excludes loss arising out of any action taken by a government in:

controlling, preventing, suppressing; or
in any relating to

any actual or suspected ‘Communicable Disease’.

While ‘government’ is not defined in the exclusion, LMA5501 states that that term is to take its definition from the policy.

Definition of ‘Communicable Disease’

In LMA5501, ‘Communicable Disease’ is defined as ‘any disease which can be transmitted… from any organism to another organism’. Requiring the disease to be transmissible between organisms does qualify the scope of the definition; food poisoning, for example, would not be excluded as a ‘Communicable Disease’ because it is transmitted by the ingestion of contaminated food or water, not by a pathogen that is transmitted between organisms.

Beyond this,

sub-clause 2 i inclusively identifies types of pathogens;
sub-clause 2 ii inclusively identifies means of transmission; and,
sub-clause 2 iii identifies possible effects of the disease or pathogen.

None of these sub-clauses, however, are essential to the operation of the endorsement.