Business Interruption Insurance and Coronavirus

Since the outbreak of the Coronavirus, businesses have been focusing mainly on the wellbeing of their employees and that of their clients. The need to protect the general public has resulted in governments across the world calling for citizens who are not in the essential services industry to stay at home. The move has been hailed by the World Health Organisation as the most practical solution to the Pandemic. Staying at home does not only slow down the spread of the virus, but it also has unprecedented negative business interruption effects. The pandemic comes as a threat even to enhanced and resilient business structures. Covid-19 has naturally opened floodgates of Business Interruption Insurance claims across the world.

Should businesses resort to Business Interruption Insurance?

We recommend that you contact your insurer or broker directly, but we are going to give general information we have received from our clients. Most of our clients who are insured under various policies have not received any payouts from their insurers with most of them being told that Covid-19 is not covered under their policies. The wording in contracts can be confusing and tricky. Various insurers who provide standard business interruption cover have resorted to dismissing claims on the basis that the policy does not cover forced closure by the government but physical damage to the business which results in the business being unable to trade, such as a fire or floods. Have you reviewed the terms of your policy? Does your policy cover Coronavirus? Would you need help in interpreting the terms of your policy?

Coronavirus has been classified as a notifiable disease in the UK, what does that mean?

This comes as good news to businesses with insurance policies that cover notifiable diseases, but this does not mean automatic cover as the wording of policies differ. Some policies list the diseases covered under ‘notifiable diseases ‘. It would all depend on whether or not Covid-19 is specifically covered. Notifiable disease covers loss that is linked to an interruption or interference caused by a disease which the authorities have stipulated to be notified to them. Most insures clearly outline diseases, period and amount covered? The scale of losses of a pandemic such as Covid-19 is insurmountable for insurers to even think of underwriting everyone affected. Such pandemics require huge financial packages from strong players like the government. The Bounce Back Loan Scheme is an example of the government playing the ultimate insurer!

How we can help?

Please use this platform to ask us any questions you may have on the subject matter free of charge and without any obligation. If possible, please attach a copy of the insurance policy. We will review your policy and help you make a claim.

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