The government’s coronavirus lockdown has hit British people and British businesses hard. Business interruption insurance is designed to cover you for unexpected events that can force your business to temporarily cease trading. But can you claim for coronavirus on your business insurance?
What Does Business Interruption Insurance Cover?
The specific cover your business interruption insurance provides will depend on your insurer. But essentially, business interruption insurance covers “acts of God”, such as fire and flood. Some business interruption insurance may also cover you for theft, or for any other event that physically damages your property.
Physical damage is key. Most business interruption policies will cover you for the repairs you need to make to your premises, alongside any loss of income you’ll experience while you’re unable to trade.
Some business interruption policies might contain clauses that will cover you for pandemics. Read your policy wording or talk to your insurers to find out more.
Unfortunately, even if your business interruption insurance covers you for pandemics, you may still struggle to claim for coronavirus.
Pandemic Insurance – Cover for Notifiable Diseases
It wasn’t until March 5, 2020 that the UK government officially listed Covid-19 as a “notifiable disease”. A notifiable disease is a condition for which registered medical practitioners have a legal duty to inform their local council or health protection team whenever they detect a case.
If insurance companies cover for pandemics, then it’s likely they’ll only pay-out for a defined set of notifiable diseases. As covid-19 only became a notifiable disease on March 5, 2020, then a business insurance policy you took out before this date will probably not cover you for this pandemic.
Does Business Interruption Insurance Cover Coronavirus Lockdown?
Another key issue is the specific nature of business interruption that Covid-19 might bring to your business. A pandemic clause in your business interruption insurance will most likely cover you for staffing issues. If so many employees fall ill that you’re forced to temporarily close, then you might expect a pay-out.
Unfortunately, for most UK businesses, it wasn’t Covid-19 that caused the business interruption. It was the government. Mandatory government lockdown meant that many businesses simply had no choice but to cease trading.
The bad news is that standard business interruption insurance will probably not cover you for forced closure by authorities. Again, it all depends on your insurer, and the specific terms of your policy. So read your policy wording and talk to your insurer for more information.
Financial Help for Businesses Struggling After Lockdown
The Association of British Insurers (ABI) have a dedicated hub of Covid-19 insurance advice. You’ll find their latest guidance, along with many useful facts, figures and resources, here. The Financial Conduct Authority (FCA) also have a suite of resources for businesses suffering as a result of the lockdown. Find all of the latest FCA guidance.
Finally, if you find that your business interruption insurance does not cover you for lockdown, you may still be eligible for a government Small Business Grant Fund (SBGF). Get more information, and find out how to apply.