(Yicai Global) Feb. 17 -- Hainan, China's southernmost province, has introduced the country's first insurance against epidemic-related losses and will subsidize 70 percent of the premium to encourage local businesses to return to work.

The insurance, which costs a hefty CNY12 million (USD1.7 million), will cover companies for up to CNY200 million (USD28.6 million) in losses caused by interruptions to operations and enforced shutdowns due to recognized infectious diseases, including the novel coronavirus. It covers loss of inventory, wages due to employees as well as quarantine and other expenses.

So far 100 companies in the tourism and manufacturing sectors have taken out the insurance.

The Hainan government and the China Banking and Insurance Regulatory Commission's Hainan branch asked the province's three main insurers on Feb. 10 to formulate an insurance product to help mitigate the risks caused by the epidemic to encourage companies to reopen for business after the extended Chinese New Year holiday, according to China Pacific Property Insurance.

Pacific Insurance, PICC Property and Casualty and Ping An Property & Casualty Insurance developed the product in just two days. Each will bear one third of the policy issuing paperwork. Pacific Insurance's Hainan branch will underwrite 21 percent of the amount insured, and the province entire insurance sector will shoulder the rest.

Editor: Kim Taylor