Monday 22 June 2020
COVID-19 – Are you covered if coronavirus effects your business?

Your standard insurance policy is unlikely to cover you for loss of income or revenue due to coronavirus.

It is possible that some policies may have a Notifiable or Communicable Disease extension which might extend your Business Interruption cover so that, if you have to shut your business or there is an occurrence of coronavirus at your premises, you may be covered for loss of revenue. However, some policies may include a geographic limit of where the disease occurs or may be subject to time and indemnity limits constraints.

Some Business Interruption policies will carry an ‘unspecified customers’ extension, whereby any loss of gross profit incurred as a result of ‘damage’ occurring at their customer’s premises will be covered. However, it’s unlikely that an outbreak of coronavirus would constitute ‘damage’ as defined in the policy. As such, the loss would effectively be uninsured

Even if there is the cover in your policy it will be limited to the amount stated in your individual Policy Wording. The monetary limits for any extension to the policy that may be applicable are restricted and unlikely to fully protect your business.

Your individual Policy Wording would need to be studied carefully to establish if any cover is in place.

As has been widely acknowledged, it is doubtful that many UK businesses will be able to claim for disruption caused by Covid-19. Standard business interruption cover bought by the vast majority of businesses is intended to cover interruption caused by physical damage (i.e. a fire or flood) at a property, resulting in a reduction in turnover or being unable to trade. This would mean that you have actually suffered a financial loss.

The Government have introduced a range of assistance packages to help business through the pandemic and associated lockdown which has mitigated or removed any losses that you may have suffered. Some businesses may have been able to submit an insurance claim for consideration, but this would not be the case if these Government packages have been utilised and no financial losses have been incurred.

This information is correct as of 16th June 2020.