Countless UK businesses face concerns that their business insurance policies may not cover them for losses caused by the coronavirus outbreak.
This comes despite the reclassification of Covid-19 to a “notifiable disease”; a fact which in most circumstances would ensure an outbreak meets official business insurance criteria. However, the Association of British Insurers recently stated that most business insurance companies will nonetheless be “unlikely” to compensate businesses for losses caused by the virus.
This is because many business insurance companies expressly state that they will only cover losses that arise as a direct result of a virus being found on the premises.
As such, business insurance customers should read the small print of their policies to ensure that they are covered in the event of business interruption or disruptions to the supply chain caused by the coronavirus outbreak.
The virus has already had a significant impact on some operators in the tourism sector, a situation which has led many in the hotel, bed and breakfast and other leisure sectors to wonder whether they might be able to make claims on their business insurance policies.
However, most have been told that they will only be able to claim if they suffer losses caused by coronavirus being found on-site, and that even these claims will not be payable unless business owners can demonstrate that they have been told to close operations on the advice of “a competent authority”.
Yet the truth remains that many businesses are already experiencing losses as a result of precautionary cancellations by clientele who may be concerned about travel at a time when there are so many government health warnings.
“An insurance policy is a contract and any cover is defined in the wording of that contract,” a spokesperson from the Association of British Insurers recently told the BBC.
He added that although it may be possible to buy consequential business interruption cover for notifiable diseases as an add-on, Covid-19 is not a “standard risk” and therefore may be difficult to insure against.