Covid-19 – Am I Covered?

The spread of the COVID-19 Coronavirus is beginning to affect every element of daily life and commercial activity.  Many businesses will suffer from the precautions and impositions that have been put in place in order to prevent the spread of the Covid-19 virus, and it is fair to ask, ‘Am I covered?’

The wordings and conditions on policies vary and each case may have to be discussed individually.

Recent coverage in the media has suggested that insurance policies will operate should the Government force closure of the premises. Unfortunately, this is not the case for most businesses.

Business interruption

Business interruption insurance covers businesses for a loss of income during periods when they cannot carry out business as usual due to an insured event (such as fire or flood).  It aims to put you back in the same trading position it was in before the event occurred. 

BI cover will usually only be triggered where property damage has occurred which is unlikely to be relevant in these circumstances.

Some policies may be extended to cover instances of interruption that are not a consequence of physical damage, but the availability of cover will be entirely dependent on specific policy wordings.

Notifiable diseases

Unfortunately, coverage as a result of Covid-19 is likely to be rare.  The UK Government has declared that Covid-19 is a notifiable disease, but it does not mean that coronavirus-related losses will be covered under the business interruption extension.  In many standard contracts, there is no cover under the specified diseases extension as Covid-19 is not one of specified diseases covered.

Some infectious disease extensions are broader and do not specify the diseases but insist on them being notifiable. 

If coverage is afforded, there would be applicable sub-limit contained in the policy, usually restricting to a maximum of £50,000 or £100,000.  In addition, a lot of policies require there to be an outbreak at the business’ premises or within close proximity of the business premise (e.g. 10-miles).

Denial of access

Some policies may include a ‘non-damage’ denial of access extension.  If your business is forced to close or is told to close by a local authority/cordoned off, you may be able to make a claim under this extension.  It is important to note that a lot of policies require there to be an outbreak at the business premises or within a specified proximity (e.g. 10-mile radius) of the business premises for you to be able to make a claim. 

Scottish Government Helpline

A helpline providing businesses across Scotland with advice and guidance on Covid-19 has been announced. The helpline, which is now live, will be open Monday to Friday, between 8.30am to 5.30pm. The business helpline number is 0300 303 0660 – select option 1 to speak to the Covid-19 team.

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