This clause specifically carves out pandemic-related events (disease outbreaks, epidemics, or pandemics) as qualifying force majeure events, often with tailored definitions and conditions. Rather than relying on general force majeure language that might be ambiguous about whether a pandemic qualifies, this clause explicitly names pandemics and may specify what triggers protection—for example, government-mandated lockdowns, a certain number of confirmed cases in a region, or WHO declarations. The clause may also define which pandemic-related impacts are excused (facility closures, supply chain disruptions, workforce unavailability) and which are not (general economic hardship or reduced demand). This clause matters because pandemics create unique ambiguity: they are foreseeable in general but unpredictable in timing and severity, and courts have split on whether pre-2020 contracts treated pandemics as force majeure. Post-COVID, insurers and contracting parties added explicit pandemic language to avoid litigation over whether COVID-19 or future pandemics qualify.
The clause is particularly important in insurance contracts because insurers historically excluded pandemics from coverage (treating them as uninsurable systemic risks), and explicit pandemic-specific language clarifies whether coverage applies, under what conditions, and what the insurer's obligations are. This clause can be a double-edged sword: it may expand coverage (by explicitly including pandemics), or it may restrict coverage (by defining narrow conditions under which pandemic-related losses are covered).
In an insurance context, carefully review whether the clause expands or limits pandemic coverage compared to the base policy. If you are the policyholder, ensure the clause covers the specific risks you face (e.g., business interruption, supply chain disruption, event cancellation) and that the trigger is objective and verifiable (e.g., "government-mandated closure of the insured's location" rather than vague language like "pandemic-related impacts"). Specify whether coverage applies to all pandemics or only those meeting certain severity thresholds, and clarify the insurer's obligations to pay claims, defend the insured, or provide alternative coverage. If you are the insurer, define exclusions clearly (e.g., "this clause does not cover losses due to general economic downturn or reduced consumer demand during a pandemic, only direct losses from government-mandated closures"). Include a sunset clause or periodic review requirement so the language doesn't become obsolete. Consider requiring the policyholder to mitigate losses (e.g., by pursuing government relief programs) as a condition of coverage.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause specifically carves out pandemic-related events (disease outbreaks, epidemics, or pandemics) as qualifying force majeure events, often with tailored definitions and conditions.
Why should I care about this clause?
Rather than relying on general force majeure language that might be ambiguous about whether a pandemic qualifies, this clause explicitly names pandemics and may specify what triggers protection—for example, government-mandated lockdowns, a certain number of confirmed cases in a region, or WHO declarations.
What are my options?
The clause may also define which pandemic-related impacts are excused (facility closures, supply chain disruptions, workforce unavailability) and which are not (general economic hardship or reduced demand).
How does this affect small businesses?
This clause matters because pandemics create unique ambiguity: they are foreseeable in general but unpredictable in timing and severity, and courts have split on whether pre-2020 contracts treated pandemics as force majeure.