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.


Laura McMillan

Partner & Director of Advocacy