Business interruption insurance – are you covered for COVID-19?
Most businesses will have purchased a commercial insurance policy tailored to the needs of that individual business. This can include business interruption cover as standard or it may have been an extension to a policy which was purchased, much like Legal Expenses Insurance (LEI). But when does the business interruption clause actually kick in and what is the scope of that cover?
The answer will depend on your specific policy wording. It is the business interruption clause that may provide for COVID-19 related impacts on your business, so now is the time to be reviewing that clause. This can potentially include cover for loss of income or profit. For some useful hints and tips on ways to protect your business from COVID-19 related claims, refer to Kelvin Farmaner’s article which can be found here.
In the first instance, you need to clarify if you have business interruption under your commercial insurance policy. Refer to your policy schedule to confirm this initial starting point. If business interruption appears then you will need to consider the scope of this cover. In some cases, standard business interruption cover is only designed to respond to physical damage at the business premises which results in a business being unable to continue trading.
Business interruption can cover virus outbreaks and diseases but be warned, this can often be limited to a restricted list of specified viruses or diseases. If the wording refers to “Notifiable Disease” rather than a specified list, then there is a possibility that you will have cover, subject to any other exclusions or requirements under your policy.
Further requirements for your business interruption clause to kick in will usually depend on a certain event taking place. For example this can include, but is not limited to your business being closed down by the Government or Local Authority due to a viral or disease outbreak or, the Notifiable Disease is present at your premises or within a specified distance of your premises.
The above is with regard to standard commercial insurance policies and some businesses may have purchased additional stand alone policies for specific circumstances. If you need assistance with interpreting your policy wording and clarifying the scope of your business interruption cover, get in touch with us today.
For more information please call us on 0800 2800 421 or contact us here.