We are now facing some uniquely difficult times. COVID-19 is providing some extreme challenges for many businesses, the likes of which we hope they will never have to face again. The question every business owner has on their minds though is, “Does my business insurance cover COVID-19?”
On the 17th March, the Government spoke about insurance companies and their positions with regards to Business Interruption cover. This has caused some confusion and as a result, we’ve received many queries from clients.
The lack of clarity related to the fact that the government had not explicitly ordered businesses to cease trading. This led many to question whether companies could claim on their business interruption cover (should they have it) as technically they were still able to trade. The chancellor later said that he would be liaising with insurers to ensure, should a valid business interruption claim be lodged, they should accept claims under the circumstances at that time.
However, Business Interruption cover is generally based on a specified list of diseases and excludes new and emerging diseases, like COVID-19. Therefore, to clarify, whether the businesses had been ordered to stop trading or not was irrelevant, as even with business interruption cover in place, it’s unlikely that COVID-19 would be covered under many standard Business Interruption policy wordings.
Most companies will not be affected by this discrepancy as business interruption is an optional extra on many policies, and for various reasons, we assume they relate to cost in many cases, the majority of business owners do not select to include it.
The chancellor has since stated that he cannot retrospectively change insurance contracts at this time without threatening the future of the insurance industry. Instead, he has released a raft of measures aimed at helping to mitigate company’s lost revenue during this unfortunate time.
We fully appreciate as a business you do not want to hear that you are not insured for an event which is out of your control.
Over the next few days and weeks, we will be releasing various documents and video content which will hopefully help you plan and prepare your business going forward.
Additionally, the government has set up a dedicated Government web page to help businesses.
This page also provides a link to the governments Business Interruption loan offers which could provide some relief.
Things are changing
The government are holding daily press conferences and the landscape is changing daily. Therefore, if you wish to keep informed and would like to take advantage of our free business templates and see our video content. We would suggest following us on Twitter and LinkedIn, and ensure you are subscribed to our newsletters, you can do this by sending a blank email to firstname.lastname@example.org with the subject link ‘SUBSCRIBE’.