The Government has informed the public that struggling businesses will be able to claim on their business interruption insurance during this difficult time. For most, this is wrong. In fact, the vast majority of policies do not cover anything related to COVID-19.
The insurance industry has been extremely vocal that there won’t be any cover for many coronavirus-hit businesses during this tough financial period.
You may be covered, but not know it
It is not certain that you will not be covered, there is a small chance that your current cover already protects your business against the consequences of coronavirus, and the nationwide response to it - though those with this cover are unlikely to realise it.
There are two types of policy extensions to your business interruption cover that can potentially cover you for this situation:
Infectious Disease Extension
Many policies expressly state which diseases fall within the realm of being an infectious or notifiable disease. If this is the case, your policy will not provide cover. Being a new disease, when the policy was written, COVID-19 will not have been included.
Other policies will define the disease with reference to the actions of the government. Since the UK Government has named COVID-19 as a notifiable disease throughout the UK, it is possible you may fall into this definition, and be able to make a claim.
Many policies require the disease to be on your premises, others specify a radius from your premises.
Denial of Access Extension (non-damage)
This may cover you if you are prevented from accessing your property by an event, or by the actions of a competent authority, thus causing your business interruption cover to engage.
In this clause, there are often very subtle differences in wording, depending on the insurer or policy. You may be covered, but it will depend on your particular circumstances, and the specific policy wording.
Alex Balcombe, partner at Harris Balcombe, comments: “I firmly believe that the Coronavirus pandemic means that the Government needs to do more to assist the insurance market to look after policyholders.
“We are already seeing huge delays. This is an unprecedented situation and one that requires immediate action.”