Coronavirus (COVID-19) outbreak: legal exposure for corporates
Many of our clients with exposure to Chinese contractors either through the labor market or the supply chain will be impacted by the coronavirus (COVID-19). We don’t yet know the full extent of the virus or the size or the duration of its impact – we do, however, expect a more volatile business environment in the near term with the potential for significant disruption across global supply chains in the long term. Although key questions at this time naturally relate to how to manage exposure to the virus, it is essential to consider its impact on the market.
Delays and disruptions caused by fears about the virus have the potential to have major impacts on manufacturing and supply chains. At what point does the epidemic become a force majeure event or MAC, and what are the implications under funding and contractual arrangements? How will work health and safety systems be effectively structured and implemented to preserve business interests and to ensure the safety of workers? Are existing business continuity plans properly structured to address such circumstances should they be implemented to allow for the recovery of operations?
Our full client alert which addresses these topics and more is available here.
We will continue to monitor the situation and provide updates in regard to risk management measures which corporates should consider.