07, April, 2020
Our Response to Covid-19
In accordance with Government advice, most of our teams are now working from home. Our robust business continuity plan and cloud-based systems have enabled us to transition to remote working with no impact on client service. All our contact details remain the same, and we have the technology and people in place to deliver what you our clients need.
We are all mindful of the burden placed on many of our clients by the Coronavirus pandemic; we are ready to help in any way we can
Coronavirus has changed the way we live and work for the foreseeable future. In these uncertain times we want help our clients understand the market and the effect of Covid-19, and we will be issuing regular advice and guidance.
Please take a look at our summary of the unoccupancy position where we have obtained responses from Insurers.
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 the specific wording of your policy.
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 a specified proximity of the business premise (e.g. 10-mile radius).
Denial of access
Some policies 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.
Closure of your business
Recent coverage in the media has suggested that insurance policies will kick in should the Government force closure of the premises. Unfortunately, this is not the case for most businesses.
The has today released the following statement:
“Irrespective of whether or not the Government orders closure of a business, the vast majority of firms won’t have purchased cover that will enable them to claim on their insurance to compensate for their businesses being closed by the Covid-19.
Standard business interruption cover – the type that the majority of businesses purchase – does not include forced closure by authorities as it is intended to respond to physical damage at the property which results in the business being unable to continue to trade.
A small minority of typically larger firms might have purchased an extension to their cover for closure due to any infectious disease. In this instance, an enforced closure could help them make a claim, but this will depend on the precise nature of the cover they have so they should check with their insurer or broker to see if they are covered.”
Unoccupied premises where businesses are temporarily closed
If your business has to temporarily close because of Covid-19, if are taking the appropriate steps to mitigate the risk of damage to the property whilst unoccupied, insurers should be flexible around the period of un-occupancy specified on the policy document. We are working to confirm this position with all of our insurer partners. This section will be updated when we do.
Policies will often include conditions that are intended to ensure good practice in protecting buildings when they are unoccupied. It is important that you check your policy wordings and understand what steps you need to take.
If there are any specific requirements as part of your insurance contract that you are unable or unlikely to be able to comply with, such as on-site security, speak to us so that we can advise you.
Event cancellation insurance
If your policy includes communicable diseases and the government or a public authority forces you to cancel an event, you may be able to claim for irrecoverable loss of costs or revenues. Conditions will vary so individual policies would need to be looked at.
Coronavirus is now a standard market exclusion on new event cancellation policies.
Motor & Home Insurance
Following guidance from the Financial Conduct Authority, motor and home insurers have committed to the following:
Working from home. If you are an office-based worker and need to work from home because of government advice or because you need to self-isolate, your home insurance cover will not be affected. You do not need to contact your insurer to update your documents or extend your cover.
Those who cannot work from home. If you have to drive to your workplace because of the impact of Covid-19, your insurance policy will be valid. You do not need to contact your insurer to update your documents or extend your cover.
Use of cars to help communities. If you are using your own car for voluntary purposes to transport medicines or groceries to support others who are impacted by Covid-19, your cover will not be affected. You do not need to contact your insurer to update your documents or extend your cover, read more.
Key workers. If your work* is critical to the national response to Covid-19 and you need to use your own car to drive to different locations for work purposes because of the impact of Covid-19, your cover will not be affected. You do not need to contact your insurer to update your documents or extend your cover.
*everyone who works in one of the critical sectors listed by the government.
Updated guidance on MOTs: The Department for Transport has released a statement for consumers who have a car, motorcycle or small van MOT due in the next 6 months .
Given this additional guidance, we expect motor insurers to continue to provide cover for consumers’ car, motorcycle or van insurance due to their temporary situation, in line with Government policy of not being able to receive (and not needing) a new MOT certificate. This includes at renewal, to ensure customers are able to shop around for their insurance.
If you have any questions or concerns regarding your policy, contact us and we will do our best to advise and assist you.