In 2019, Yasmin booked a cruise in the Caribbean. She was due to depart in February 2020. The cruise would finish in the Cayman Islands, where she would spend a few days before returning to New Zealand.
Despite the developing Covid-19 crisis, Yasmin’s cruise went ahead as planned. However, when the ship arrived in the Cayman Islands on the final day of the cruise, the port authority didn’t let the ship dock. Later that day, the Cayman Islands’ borders closed to foreigners because of the Covid-19 crisis. The ship spent a few days at sea trying to negotiate entry to the port, but eventually returned to Jamaica for passengers to disembark.
Yasmin missed her flight back to New Zealand and her pre-booked arrangements in the Cayman Islands.
Yasmin submitted a claim to her travel insurer. Her claim was declined because her policy contained the following exclusion:
‘We will not pay for any claim arising directly or indirectly out of any interference with your travel plans by a government or official authority, including but not limited to refusal of a visa or restriction of access to any locality.’
Yasmin didn’t agree it was fair for her claim to be declined under this exclusion and complained to FSCL.
Dispute
Yasmin said it was the port authority, rather than the Cayman Islands’ government, that refused the ship’s entry at the time it was due to dock. Yasmin thought ‘government interference’ should relate to personal circumstances rather than a group of passengers on a cruise. Yasmin’s policy didn’t contain a pandemic exclusion, so she also thought it was unfair for her insurer to exclude loss arising from Covid-19, relying on a different type of exclusion.
Review
We reviewed Yasmin’s policy and the circumstances in which the ship was denied entry to the Cayman Islands.
‘Official authority’ was not defined in the policy. We thought it was reasonable to define ’official authority’ as including any government agency with authority to act in relation to the subject matter, which in this case was access to the port. We were satisfied the port authority met this definition.
We didn’t agree with Yasmin that government interference had to apply to an individual’s circumstances. Yasmin’s argument was that one of the examples of government interference given in the exclusion clause was refusal of a visa, which could only relate to an individual’s personal situation. However, another example given in the clause was restriction of access to any locality, which was exactly what had happened in Yasmin’s case. As such, we were satisfied Yasmin’s situation fit squarely within the wording of the exclusion.
It was correct that Yasmin’s policy didn’t contain a specific pandemic exclusion, but under the wording of the government interference exclusion, the reason for the interference was irrelevant as to how the exclusion was applied. As such, it didn’t matter that the Covid-19 pandemic had caused the port closure and the interference and that the policy didn’t contain a specific pandemic exclusion for Covid-19.
Resolution
We agreed the insurer was entitled to apply the government interference exclusion to decline Yasmin’s claim.
Yasmin wasn’t happy with the outcome, but we helped her understand why the insurer was allowed to decline her claim.
Insights for consumers and participants
Covid-19 has caused much disruption to people’s travel arrangements. Whether loss is covered by insurance policies will depend on the wording of each policy and each person’s individual circumstances.
