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Insurance Cover and COVID-19

The coronavirus is a human tragedy with the loss of life increasing daily. The resulting economic impact is just unfolding, challenging stability and the social consequences are unprecedented.

Schools have been closed and businesses forced to shut down. As a result we have been overwhelmed with calls from concerned clients wanting to find out if Business Interruption will cover a forced closure.

Sadly, in the vast majority of cases, the Business Interruption (BI) section of the insurance policy does not cover loss of income for the sweeping business closures announced last week, nor does it extend to cover any loss of stock should it pass it’s best before date. BI is usually taken to cover material damage, in most cases there has to be physical damage to insured property for the BI section to respond:

ABI Statement on Business Insurance

To avoid any confusion, when the Government indicated that they had done enough for insurance policies to be “triggered”, it is essential to make it clear that the relevant cover impacted is ONLY in respect of non-damage business interruption.  These are usually optional in policies and in many circumstances business’ insurance will NOT include this cover.

During these desperate times businesses can find out more information about help from Government in their guidance for employers and businesses.

We will do all that we can to support our clients and hope that in the coming months we all emerge safe and well.