Covid-19

As you will no doubt be aware, we are in unprecedented times with the impact of the COVID-19 pandemic having a major effect on how we live and work. The situation looks like it will continue for many weeks, possibly months, and is changing rapidly.

We recognise that this will be a significant test for you and your clients; we remain here to assist you with any questions you may have. We have taken the appropriate measures to ensure our service to you is uninterrupted. All of our advisors will be working from home and we are confident that there will not be any adverse effect on the service we deliver.

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Interruption to your business

Standard commercial insurance policies, that the vast majority of businesses in the UK purchase, provide cover against a wide range of day to day risks including damage caused by fire, flood, theft and accidents involving employees, therefore  covering unlikely or fortuitous risks. Insurers pay claims of £22m each day to firms through these policies, supporting millions of businesses across the UK each year.

There is little, if any, cover for pandemics of this nature. Only a very small number of policies will include cover for closure due to an infectious disease.

The  Government’s confusing message regarding insurance on 17 March has not dispelled the myth that business interruption insurance would look to cover Covid-19. They clarified that the measures they have put in place are enough to ‘trigger’ a claim. Critically, however, this is only for clients  who have cover for infectious diseases, and as mentioned above, this cover is extremely rare.

Does standard business interruption insurance provide cover for businesses who are not able to operate due to the effects of Covid-19?

Standard business insurance policies are designed and priced to cover standard risks and are therefore very unlikely to provide cover for the effects of global pandemics like Covid-19. This includes forced closure by the authorities. Some policies however may offer an element of cover under a ‘notifiable disease extension’. This type of extension is not commonly included as standard.

Does a ‘notifiable disease’ extension to business interruption cover my business for Covid-19?

Most notifiable disease extensions tend to cover specific diseases that will be named in the cover. If Covid-19 is not specified, then cover will not apply.

Insurers had never anticipated to provide cover for pandemics or unknown diseases under a business interruption section of a policy.  Furthermore, the likely costs to businesses  for cover that would include more unusual risks such as those posed by new diseases would be prohibitive.

Please do contact us with any concerns you may have regarding your coverage. Our advice, at this stage, is to visit the government website here: -

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/guidance-for-employers-and-businesses-on-coronavirus-covid-19

The Chancellor’s recent steps to assist businesses through these unprecedented times are of course welcome. However, please ensure you take the relevant advice before agreeing to any of these measures.

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Travel Advice  

We are seeing travel insurance cover responding to many of the situations involving Covid-19 if you are abroad and require treatment or incur additional expenses. Each policy will react differently, so please check with us to clarify  the advice for your own individual circumstances.

The Foreign and Commonwealth Office has advised against all but essential travel for 30 days from 17 March 2020. This unprecedented step actually provides welcome clarity for customers and the industry. Generally, insurance cancellation or travel disruption will relate to FCO advice. This decision will therefore allow many (or ''the majority of'') policyholders with cancellation or travel disruption cover in place to claim for cancelled trips that were already booked and cannot now go ahead. We would suggest talking to your trip or flight provider in the first instance.

Looking ahead, if this advice is lifted after 30 days but still applies to the destination you were planning to visit, then you may be able to claim under your travel insurance policy (again, provided you have the relevant cancellation or travel disruption cover in place). If you make alternative travel plans, then you may be able to transfer your travel insurance to cover your new destination.

Travel insurance policies may cover some out-of-pocket losses and help you to return back to the UK if you are advised to do so, especially if you are unable to get assistance from any other source.

Please note, if you travel against government advice then you may invalidate your travel insurance.

Please check here for all travel related advice:- https://www.gov.uk/guidance/travel-advice-novel-coronavirus

As always, we would strongly advise you to check with us as your Broker. Please contact us in the usual manner.

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Working from Home

We are aware that you may have already closed your office space and set your staff up as ‘working from home’.

Please ensure that you have checked that you have adequate cover in place for your computers and equipment being removed from the office to ensure any claims are met by insurers should any damage occur.

We are comfortable with you running your business from home. Most of our Private Client insurers will not require any further information if this is just administrative work only. Whilst unlikely, should you have clients or visitors come to your property, please let us know. It is worth speaking to your household insurer to check this advice if you do not insure your home with us directly.

It is equally important that if your office facility is now vacant, that you notify us so we can advise the relevant insurers. You will have responsibility to ensure the premises are secure and visited regularly.

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Cyber Insurance

We have seen a growing trend of cyber related fraud from the Covid-19 pandemic. In times of uncertainty, criminals are taking advantage of people’s worry and concerns. Action Fraud have reported seeing £970,000 of losses alone in the last 30 days.

Please ensure you remain vigilant and that you all staff are clear to your IT and Financial Security Policy. Does this need modifying now your staff are working from home? If in any doubt, please talk to us.

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Directors’ & Officers’ Liability

Directors' and Officers’ liability (D&O) insurance is intended to provide protection for individuals in these positions    from investigations and claims that may arise from decisions taken by them in their capacity as a director or officer of the company. The policy will be triggered by allegations that they have committed a "wrongful act".

In the case of COVID-19, if a director or officer faces a claim alleging their contingency planning was unsatisfactory or that inappropriate management decisions were made, any D&O policy in place might be triggered.

While D&O insurance policies will often exclude cover for claims for bodily injury and property damage, these exclusions will often not apply to claims for emotional distress or mental anguish.

We would please ask you to contact us should you feel there may be a circumstance that may give risk to a claim under your D&O policy.

We remain here to help and advise you through these uncertain times.

Russell Sessions, ACII
Director
Vizion Commercial