Coronavirus and Business Interruption Insurance

It was announced on 4 March that the Government will formally register Covid-19 as “notifiable”.   Although this is good news in some respects, it does not automatically mean that businesses will be able to claim under their business interruption insurance.

Business interruption

Typically, standard property/business interruption policies do not provide coverage as physical damage is usually required as a trigger.

Special covers for business interruption without property damage are available as an extension, but are not widespread.  This type of coverage usually requires an outbreak at the premises itself to claim for notifiable disease, as well as a “denial of access” order by public authorities.

Importantly, most insurers specify exactly which notifiable diseases they cover.  It is unlikely that Covid-19 is on this list and so will not be covered.

All policies vary and the situation is changing daily.  If you have any concerns or would like to review your policy, please do get in touch with your broker.

Preparing for a Pandemic

It is important that you develop robust and flexible business continuity arrangements that will help to minimise the impact of any disruption.

The Government has developed a checklist for organisations.  It identifies specific activities large businesses can do now to prepare, many of which will also help you in other emergencies.  You can download the checklist here.

You can find an overview of Covid-19, information on outbreaks of coronaviruses and guidance on how to prevent a Covid-19 infection here.

You can read guidance from our insurer partner, Zurich, on pandemic planning, along with a checklist that can be used to plan for a pandemic and minimise its impact here

We are closely monitoring this fast-changing situation.  We are in close contact with our insurers and will keep you informed and up to date with all relevant information as soon as it becomes available.  We will do all we can to help our brokers and their clients through this challenging time.