TOKYO: Toyota Motor Corp’s production plants in China will stay closed through Feb 9, the Japanese automaker said today, in response to the spread of a new coronavirus following a sharp rise in fatalities.

Toyota, which runs plants in regions such as the northern city of Tianjin and the southern province of Guangdong, said the closures after the Lunar New Year holidays were in line with transport lockdowns in some places, and as it assesses its parts supply situation.

Many global companies from hotels and airlines to industrial houses are expected to have to foot the bill for disruptions caused by a new coronavirus in China, with epidemics usually excluded from insurance cover, experts said.

With 132 deaths in China and new cases being reported around the world, companies are set to face billions of dollars in losses linked to events and travel cancellations and closure of businesses, they said.

The virus originated in the city of Wuhan, forcing airlines to cancel flights and companies including Facebook and HSBC to suspend travel to China.

“For insurers, the bulk of the claims from this outbreak will come from businesses, mainly travel, hospitality and event firms, followed by mortality and healthcare costs,” said a Hong Kong-based insurance sector lawyer with a global law firm.

Risk modelling firm RMS said it was too early to estimate insured losses.

While some large global firms buy coverage for communicable diseases, most “standard insurance policies” exclude such outbreaks to keep costs low, said the lawyer, declining to be identified as he was not authorized to speak to the media.

Global insurers typically cover risks such as earthquakes and plane crashes, but have been paring back exposure to certain risks, such as shipping, to avoid huge losses.

Previous viruses, such as SARS, Ebola and Zika, have also led insurers to be more cautious about exposure, with specific virus exclusions added to most basic coverage policies, industry insiders said.

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