Will my insurance cover my business against Covid-19?

As a business owner, you’re probably looking at the insurance cover you have in place to see if it protects you from the financial implications of the Covid-19 pandemic.

The first step is always to contact your broker, if you have one and if not, your insurers, to see if any cover is in place.

However, it is likely that your policies do not provide cover. It is our view that the majority of businesses in the UK are unlikely to have any financial protection (whether for revenue or payroll) for losses due to the Covid-19 outbreak.

Why we think businesses are unlikely to be covered for losses due to Covid-19

Generally, business interruption cover – usually a section in a commercial combined policy – is sold to compensate for financial losses due to physical damage to property (e.g. in circumstances such as fire and flood, where a business is unable to operate for a period of time).

The Association of British Insurers has confirmed, in a statement published on 17 March 2020, that standard business interruption policies do not generally cover closure forced by the government. This means that most businesses will be uninsured.

Some policies do include ‘restricted access’ cover or ‘non-damage business interruption’ cover. These cover circumstances such as the police cordoning off an area due to an event such as terrorism, a fire, or the risk of a collapsing building. However, again, this is unlikely to cover forced closure due to the Covid-19 outbreak.

Some – but not many – insurance providers also offer extensions to cover for closure caused by an infectious disease. Covid-19 has now been classified as a ‘notifiable disease’, so would now qualify if this cover has been selected.

As always, its essential you check the wording of your policies. In adiditon, when renewing any policies, it is worth investigating the possibility of adding this. Your broker will be able to advise more fully.

If I’m not insured, are there any other options available?

The UK government has and will look to intervene by way of subsidies or similar. There are likely to be growing calls to intervene as the outbreak develops.

Whatever your situation, the important thing is to focus on implementing guidance provided by Public Health England and the government, with a view to balancing the protection of your workforce with the protection of your business.