Britain is in the midst of the most serious human and economic crisis since the Second World War. The impact of the COVID19 virus on organisations is far-reaching and unprecedented. Businesses of all varieties from all industries find themselves in uncharted territories and dealing with a variety of commercial issues as a result of the pandemic.
The situation is constantly evolving with new information and daily announcements from the government and we are able to assist our clients to mitigate the impact of the virus for them and their businesses across the globe.
At these troubled times, insurance cover will be at the forefront of many businesses' minds to attempt to protect themselves from the difficult situations they find themselves in.
Our insurance team has extensive experience in assisting clients from different sectors including both national insurers and a variety of businesses in respect of all aspects of insurance cover. Every policy wording is different and we can provide advice in respect of any issue or claim that arises.
Business Interruption Insurance
Of particular relevance to businesses now closed due to the nationwide lockdown, is whether their existing insurance cover includes "business interruption insurance." This is a specific type of insurance which covers a business for loss of income during periods when they cannot carry out their business in the usual manner for reasons specified in the policy. The insurance will generally replace certain losses sustained by the business during the period of the disruption.
However, not all policies, even those which include "business interruption insurance" will provide payments to those who are insured.
For example, Covid-19 falls within the definition of "Notifiable Disease" after it was added to the Health Protection (Notification) Regulations 2010 on 5 March 2020.
Some policies will cover notifiable diseases, but others exclude this type of claim. Alternatively, some policies provide for specific notifiable diseases only; where those policies were entered into before the pandemic, then Covid-19 will not fall within the policy wording. Other policies will provide cover only where there has been an actual outbreak on or very close to the insured premises.
Policy wording obviously changes as between different insurers but also as between different sectors, for example even within the leisure sector, there will be different policy wordings and therefore different cover for hotels, restaurants, gyms, holiday parks and other leisure facilities.
Business interruption insurance may have been offered as an optional extra to business insurance packages, which combine a number of different policies under one premium. However, most businesses purchase a package of insurance from a broker who will work with them to ensure that they have the appropriate cover for their needs. As such, "business interruption insurance" may not be a prominent clause in the policy and particular exclusions and conditions need careful review and consideration.
Our team is currently advising many businesses in respect of insurance coverage where they have had to close due to the enforced lockdown and will lose significant revenue as a result.
Timing of the notification is important as is communication with the insurer. Businesses must keep in touch with their insurers and brokers, and where there is a claim under a policy, it can be crucial to make that claim in a time and form stipulated under the policy.
In these uncertain times, it is essential to have clarity and certainty from your legal advice, which we can provide to our clients and help them with their business needs.