Across the globe, we find ourselves in an unprecedented situation. Covid-19 has led to the lockdown of an increasing number of countries and right here in the UK, we’re seeing businesses shutting down or taking other measures to account for changing guidance.
Pubs, clubs, bars, shops and more are seeing reduced visitors, stock shortages and are feeling the full force of the economic result of the pandemic. One question on these business’s minds is whether Business Interruption Insurance could cover them for losses incurred as a result of Government guidance. We’re exploring, below.
What Is Business Interruption Insurance?
Business Interruption Insurance, at its core, is a form of insurance cover that offers protection against any economic loss incurred as a result of a business’s inability to put a property to normal use. While the wording and fine print will differ from insurer to insurer, this typically involved physical damage to the property itself, but in some cases, can also include any government action, such as an evacuation order. This may differ from policy to policy, however, it generally requires there to be damage that results in an economic loss to the company in order for a claim to be successful.
How Do I Know if I Have Business Interruption Insurance?
The best way to check if you have Business Interruption Insurance is to speak with your business insurance provider. In most cases, you can purchase this insurance separately and some may give you the option to add it to other standard covers. Most First Party Property Insurance policies will include this, but it’s best to check. If you don’t have this cover, you could still take out a policy. We offer shop and office insurance policies that will include some level of interruption insurance, though feel free to get in touch for more information.
Will It Cover Me If I Need To Close Due To The Covid-19 Outbreak?
If you have Business Interruption Insurance, whether you’re covered for the Covid-19 outbreak will depend on the policy itself. The UK government has stated:
|“Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met.
Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.”
While these reassurances have been given, businesses should still be aware that some policies may only approve an insurance claim in the case that your business should need to shut due to a Coronavirus outbreak within your property, that has led to a medical professional suggesting the shutdown of the business for a period of time.
Overall, whether your business will be covered by insurance really comes down to a case-by-case evaluation. Some policies offer full pandemic cover, while others may require your business to have been shut down due to an outbreak within the site.