Hurricane-damaged US firms dig in for insurance fight

A car dealership is covered by Hurricane Harvey floodwaters near Houston. (Reuters)
Updated 15 September 2017

Hurricane-damaged US firms dig in for insurance fight

NEW YORK: Business owners who are trying to get back on track after hurricanes Harvey and Irma now face a different sort of challenge: trying to recoup lost income from their insurers.
Exclusions in the fine print of policies, along with waiting periods and disagreements over how to measure a company’s lost income, make business interruption claims among the trickiest in an industry renowned for complexity.
“I think the whole thing is a rip-off,” said Thomas Arnold, an optometrist in Sugar Land, Texas. He said his business, Today’s Vision, was shuttered for almost five days after Hurricane Harvey struck because nearby flooding kept employees and patients from getting there.
Arnold says he pays $1,083 per month for coverage. But after he filed a claim, he said the US unit of Zurich Insurance Group, rejected it because his business was not physically damaged.
Zurich does not comment about specific claims, the company said in a statement. It added that business interruption coverage generally requires “direct physical damage” to a property for a payout.
It was Arnold’s second disappointing experience with business interruption coverage. He said another insurer denied his claim in 2008 after a nine-day power outage from Hurricane Ike.
Devastating storms are hitting the US with increasing frequency. Risk modeling firm AIR Worldwide predicts losses to all properties from the flooding in Texas alone will be $65 billion to $75 billion, regardless of whether they are insured.
The income lost by shuttered firms makes up a significant chunk of overall losses from a natural disaster and can hobble the pace of a community’s economic and social recovery.
Hurricane Katrina in 2005, for example, caused about $25 billion in insured commercial losses, of which $6 billion to $9 billion has been attributed to business interruption, according to information posted on AIR’s website.
The National Flood Insurance Program does not offer a business interruption component. The program is largely used by homeowners, but it also covers commercial structures for up to $500,000 in damage, with another $500,000 for the contents.
That is why companies able to afford the additional protection of business interruption insurance, usually large and medium-sized firms, often purchase it despite the potential for unsuccessful and drawn-out claims.
Big Star Honda, a car dealership in Houston, lost 600 vehicles – 95 percent of its inventory – and was shut for five days after Harvey.
Its managers are now girding themselves for a potentially long slog with the firm’s insurance company as the dealership prepares to make a claim on its business interruption policy.
“We’re collecting every single invoice that pertains to the hurricane,” said Allen Paul, Houston regional vice president of Ken Garff Automotive Group, which owns the dealership.
“I’m really curious to see how that goes,” he said.


Indonesia begins human trials of anti-virus vaccine

Updated 42 min 30 sec ago

Indonesia begins human trials of anti-virus vaccine

  • The third phase of the clinical trials of the vaccine — which is manufactured by China’s Sinovac Biotech in collaboration with its Indonesian pharma counterpart, Bio Farma — began on Tuesday
  • The third phase is a must before the vaccine, known as CoronaVac, goes into the production stage and is a prerequisite for all pharmaceutical products, including medicines and vaccines

JAKARTA: Indonesia is stepping up efforts to find a COVID-19 vaccine by launching human trials of a potentially effective drug amid criticism of its lacklustre handling of the pandemic and concerns about its plummeting economy.

The third phase of the clinical trials of the vaccine — which is manufactured by China’s Sinovac Biotech in collaboration with its Indonesian pharma counterpart, Bio Farma — began on Tuesday and is being conducted by the Padjadjaran University School of Medicine at six locations in Bandung, West Java province, where the university and the state-owned pharma company are based.

“The first day of the trial went well, with 20 volunteers in each of the six locations injected with the potential vaccine. We have no complaints so far, and we are preparing the second injection batch on Aug 14,” Iwan Setiawan, a spokesman for Bio Farma, told Arab News on Wednesday.

He added that the six-month trial would require the participation of 1,620 volunteers who were “in good health and had not tested positive” for the disease.

Ridwan Kamil, governor of West Java, Indonesia’s most populated province, is among the volunteers who have signed up for the trial.

The third phase is a must before the vaccine, known as CoronaVac, goes into the production stage and is a prerequisite for all pharmaceutical products, including medicines and vaccines.

“The potential vaccine had gone through three trials; the pre-clinical, the clinical trial first phase and the second phase in China,” Bio Farma CEO Honesti Basyir said in a statement.

According to Basyir, Sinovac is one of the few institutions that have progressed to the third phase of the clinical trial from among hundreds of research institutions around the world that are developing the COVID-19 vaccine.

According to Oxford Business Group’s COVID-10 Economic Impact Assessment, there are more than 150 different vaccines that international researchers are working on. However, only 26 have reached the human trial stage so far.

Once the trials are concluded, Bio Farma will register the vaccine with the Food and Drug Supervisory Agency so that it can begin mass-production of the drug.

“We have prepared a production facility for the COVID-19 vaccine with a maximum capacity of 100 million dosages, and by the end of December this year we will have an increased production capacity to produce an additional 150 million dosages,” Basyir said.

President Joko Widodo oversaw the first injections to the batch of volunteers in one of the six locations and also toured Bio Farma’s production facility. 

“We hope this clinical trial would conclude in six months and so we can start producing the vaccine in January and vaccinate our people soon,” Widodo said.

State-Owned Enterprise Minister Erick Thohir, who is also the head of the COVID-19 mitigation and national economic recovery committee, said that Bio Farma was a well-established vaccine producer whose products were halal-compliant and used in 150 countries, including in the Middle East.

The collaboration with Sinovac is one of three vaccine-development projects that Indonesia is engaging in with foreign parties as it grapples with a surge in infections. At the same time, social restrictions and economic activities were eased. The other two projects are with South Korea’s Genexine and Norway’s Coalition for Epidemic, Preparedness and Innovation.

As of Wednesday, Indonesia had reported 130,718 infections with 1,942 new cases, 85,798 recoveries and 5,903 deaths, although experts suggest that the numbers could be higher due to the country’s low testing capacity.

Cases also surged in the capital Jakarta with workplaces emerging as the new infection clusters after thousands of employees returned to work recently.