Coronavirus (COVID-19) – Insurance Guidance
Due to an increasing number of enquiries, from both our business customers and our Private Clients, I thought it prudent to issue our thoughts and guidance from an insurance perspective for our clients. As always, we want to be practical and supportive to our clients and assist in any way we can to allow you (our clients) to focus on your day to day business.
We are very mindful not to add more noise to an ever increasing public dialogue. From an insurance perspective, there are clearly some situations which could develop, but as things stand, the likelihood of significant insurable events for our client base remains fairly low and we must keep that in context.
Business Interruption – One of the areas that cause concern is if for whatever reason your premises or place of work is either subject to an outbreak or is caught up in a community outbreak scenario. Fundamentally, this section of policy cover is typically to cover an interruption based on physical damage to your property or surrounding area, however it is not unreasonable to expect insurance cover in this “non-damage” scenario. Our discussions with various insurers has shown that there are different levels of cover that have been given and that not all policies will respond in the same way but to summarise the most common situations –
- Insurers could cover a specific, listed number of known communicable diseases, e.g. Legionella. There has been a move to this over the last decade (prompted in part by the H1N1 swine flu pandemic in 2009) – which essentially leaves policyholders without cover for the current COVID-19 situation.
- Insurers could still use a wide “Communicable Disease” wording which isn’t specific and therefore should trigger cover as this outbreak has this week been classified as a “Notifiable Disease” in the UK.
- Insurers might not give cover at all for Communicable or Notifiable Disease, or that it is an “optional” coverage that should have been specifically added to your policy.
Notwithstanding which of this scenarios applies to you, there are still further nuances that need to be understood – most notably, whether or not cover applies to a specific outbreak within your specific premise only, or whether it includes an outbreak in your immediate area which impacts on your premise.
ADVICE – If you believe your business could be subject to a financial loss due to a scenario that revolves around an outbreak in or around your business premises, then please feel free to contact us. We would be happy to work through the scenario with you, and if we agree there is a legitimate insurable interest we can investigate your specific coverage and advise you accordingly.
Travel Insurance – The other key area of impact is clearly travel, and I’m pleased to say that there is a more consistent picture in respect of cover. Our key partner insurers on this class have yet to impose any cover restrictions specifically with regards to this outbreak. That said, it has been mooted that there could be some specific endorsements that might start to be applied to all new policies and any policy that falls due for renewal – we will react accordingly should that be the case.
We are aware of some clients (not ours) who are potentially trying to make claims which are not reasonable – one insurer cited a Directors holiday plan for 6 months’ time, to an currently unaffected part of the world. Clearly in that situation it is unreasonable to expect insurance cover for a pre-meditated cancellation. Likewise, the point of booking becomes quite relevant. If a business (or leisure trip) was booked in good faith, prior to any knowledge of any issue, then cover for cancellation is more than reasonable if this destination is now subject to the FCO (Foreign and Commonwealth Office) advice not to travel. If this same trip was booked now, in the full knowledge of the FCO advice, then clearly that is not reasonable and cover wouldn’t be given.
ADVICE – If you have travel plans that you believe are affected (please refer to the FCO advice first), then please call us to discuss the specific situation and we will clarify your cover situation. Likewise if you have a business or leisure travel requirement then please discuss that with us BEFORE you book so that you can do so with the full knowledge of how your insurance policy will respond should the situation develop and affect your trip.
RESOURCE – FCO / Gov.uk – Travel Advice – https://www.gov.uk/guidance/travel-advice-novel-coronavirus#foreign–commonwealth-office-fco-travel-advice
We do not want to cause any over-reaction to this situation, that is not in anyone’s best interest. We always want to provide hands on, practical support for our clients, so on reading this communication should you want to discuss anything with us then please do not hesitate. It’s absolutely what we are here for.
Regardless of the situation, the likelihood, or the cover that you have or don’t have – the underlying discussion that we continue to promote, and that this situation only highlights is one of BUSINESS RESILIENCE. A fundamental practice when dealing with risk and ensuring your business is resilient against the host of known and unknown threats, is the practice of planning. Yes we place the physical insurance policies which protect you, but we feel our duty and expertise is to help you with this planning and understanding. So, if you don’t feel like you have the right plans in place to deal with any aspect of disruption (insured or not) then I’d urge you to get in touch with me, or your normal point of contact to arrange a specific discussion on Business Resilience planning.
Be diligent, but continue to be successful and let us help wherever we can.
Jon Nottingham Founder & Group CEO
Call us today on 0330 056 3665