British businesses would be largely unprotected from the financial impact of a flu pandemic, experts warned yesterday.
They said business-interruption policies, which insure companies against disasters such as fire or serious criminal activity, would not cover them in the event of a flu pandemic, potentially opening them up to huge and unquantifiable losses.
They also warned new policies specifically offering influenza cover are often worthless because they are backed by financially shaky insurers with poor credit ratings, are badly worded or have payout limits that are too low to make them worth having.
The warnings come amid mounting concerns about the impact of a pandemic on Britain's economy after of the discovery of the H5N1 virus - the most feared form of avian flu - at a Bernard Matthews turkey factory in Suffolk.
Martin Dockrill, project manager for the Avian Taskforce set up by the insurance broker AON, said: "There is very little chance of a standard policy covering bird flu. That is true in 99 out of 100 cases.
"It is not a named risk in most policies. Even where it is, policies require that a government officer has visited premises and ordered closure. That is just not going to happen in the event of a flu pandemic."
Mr Dockrill pointed to the experience in Canada during the Sars outbreak, when businesses lost millions of dollars as a result of frightened staff failing to turn up for work.
"They just took it upon themselves so their employers were not covered," he said. "Some insurers have looked at offering policies but they have been from companies with poor credit ratings, or the policy wording is not very good, or the cover limits are too low."
He added: "Most companies would be better off formulating policies to protect their staff and their businesses rather than relying on the insurance industry."
Mr Dockrill's views were backed up by the livestock insurance law specialist Sheila Simison, from the international law firm Barlow Lyde & Gilbert. She warned that poultry businesses - in the vanguard of the British H5N1 outbreak - could expect little help beyond statutory government compensation.
"Such an occurrence must have been long dreaded by those in the poultry industry, especially as their insurers may well have excluded intentional slaughter of birds and death caused directly or indirectly by avian influenza at the latest round of renewals," Ms Simison said.
"Government compensation is payable under the Animal Health Act 1981 for healthy birds that are compulsorily slaughtered for avian influenza control purposes. The Government does not pay for consequential losses or indirect losses to business during an outbreak, nor does it pay compensation for diseased birds."
AON has been one of the leaders in assessing the impact on a influenza pandemic and advising businesses on how to cope.
A recent paper, Exploding the Myths, warned advancing science was still "lagging behind" a changing virus and that while there had been a large increase in the supply of antiviral drugs, it had not been targeted to help business.
The report also urged business to improve plans to deal with any pandemic.
Last month a tripartite study conducted by the Treasury, Financial Services Authority and the Bank of England,warned that Britain's cash distribution could suffer a partial breakdown in the event of a pandemic. It also found that some people could be left without access to funds as cards expired and were not replaced in time.