Local Commercial Insurance Broker, HI Commercial warns businesses their policies are unlikely to cover for loss of business through pandemic cover and business interruption cover.
Concerned business owners have many questions about their insurance during this unprecedented time, the team at HI Commercial is working with insurers to provide answers as quickly as possible.
Following the Government announcement on 17 March which stated that businesses would be covered by their insurance policy, for loss of income under the Pandemic Insurance section, the firm has found this to be misleading.
Luke Byron, Director at HI Commercial says:
“Our team has 75 years combined experience and we are not aware of Pandemic Insurance cover. This is not a standard cover and therefore, unfortunately, the majority of insurance policies will not include it.”
“The Government also announced that Business Interruption insurance would cover loss of income due to COVID-19. Unfortunately, this advice is not factually correct as Business Interruption cover under an insurance policy provides for loss of income in the event that the insured premises suffer from physical damage (e.g. fire, flood, escape of water), resulting in the business being unable to trade. As there has been no physical damage caused by COVID-19, the standard Business Interruption section will not respond to the loss of income claims, made by policyholders.”
“Some policies provide extensions to the Business Interruption section of cover, details of which will be found in the policy’s wording.”
“With regards to notifiable diseases, some policies include cover for loss of income arising from ‘notifiable diseases’. However, we are finding this varies between insurers. Some policy wordings provide a list of what notifiable diseases the insurer will cover. COVID-19 is in most cases not listed, therefore not covered.”
“COVID-19 was added to the list of Notifiable Diseases by the Government earlier in March. This may mean that the insurer may provide cover in this instance. We await confirmation on this.”
“Some business owners may be relying on Business Interruption cover which will be shown on the policy schedule. Package policies include shops, offices, pubs, restaurants, hotels.
Commercial Combined policies may also include Business Interruption cover however, this differs depending on if the cover was specifically requested, or not.”
“The Government forced the closure of Cafes, Pubs, Restaurants, Cinemas, Gyms, Sports Clubs and similar businesses (to slow the spread of COVID-19), presents a separate issue in terms of loss of income for businesses. Again we are working with insurers to confirm whether or not, loss of income resulting from forced closure is covered under an extension of the Business Interruption section of policy wordings.”
For further updates as they arise, please visit www.hicommercial.co.uk.
