As more businesses close as a result of government rules and guidance surrounding COVID-19, many are querying whether their business interruption insurance cover will respond.
Key points to consider include:
- The Association of British Insurers has advised that only a small number of businesses will have business interruption cover for financial loss caused by pandemics or infectious diseases.
- Business interruption policies more commonly provide cover where there has been physical damage to property. It may be difficult for businesses to argue that arises here.
- A few policies will provide cover for non-physical damage to property. Whether such cover is triggered will depend on the policy wording.
- Business interruption policies which do extend to infectious diseases will commonly list exactly which infectious diseases are covered. As COVID-19 is a new infectious disease, it is unlikely to be included within that list.
- Some policies will (i) provide general cover for pandemics or infectious diseases or (ii) have a defined list which may be wide enough to include COVID-19.
- Remember that if you are covered, or think you are covered, you will need to make sure that you adhere to the other terms and conditions of your policy.
- If you are unclear on what cover you have, contact your broker, insurer and/or legal adviser.
The government has been in discussion with the insurance industry and whether the position will change in terms of which policies shall respond remains to be seen.