13 March 2020

Coronavirus – are you covered?

We are getting many members contact us regarding whether they will be covered by their insurance in the event of business interruption brought about by the Coronavirus.

It's important to point out that all policies have slightly different wording, and every company should contact their broker to get confirmation of the wording, if they are worried. However for many companies the position generally across the insurance industry is the same that there is no cover for Loss of Profits/Business Interruption.

The main cover under a Business Interruption policy is for loss of gross profit following insured physical damage at a client's premises and there are generally 3 extensions relevant to non-damage losses which could be relevant to coronavirus:

Specified Diseases; whilst this covers loss following a Specified Disease occurring at (or within 10 miles of) the premises, or discovery of an organism which is likely to result in a Specified Disease, the diseases are specifically listed and coronavirus/COVID-19 is not one of them.

Prevention of Access; this extension only covers interruption due to physical prevention or restriction of access to premises following physical damage to property within one mile of the premises.

Loss of Attraction; this extension only provides cover for interruption following physical damage to property within one mile of the premises'.

Although some of you may have read that, once the virus is officially a ‘Notifiable Disease', it would be covered, but this is not necessarily the case. This is because in the majority of policies, where ‘Notifiable Disease' are a defined policy term, they include with it, the list of diseases to which the policy refers, of which coronavirus/COVID-19' is generally not included.

Due to the serious nature of the outbreak and the likely potential exposure for Insurers, it's extremely unlikely that any Insurer would consider adding coronavirus/COVID-19' to the list.

However it's important that you contact your broker to check the wording on your policy.