Commercial Insurance & COVID-19 Quick Q&A

Commercial insurance policies provide cover against a wide range of risks, that can be tailored to the needs of individual businesses, including extensions to cover. Businesses who are concerned about the impacts of Covid-19 should check the scope of their cover, and check with their insurance adviser or broker.

Standard business insurance policies are designed and priced to cover standard risks and are therefore unlikely to provide cover for the effects of global pandemics like Covid-19.

Insurance policies are tailored to the needs of the individual business. It is not a one size fits all approach, as the insurance needs of no two businesses are the same. A small number of businesses may have cover in place that will specifically provide for business interruption arising from notifiable diseases.  However, this type of extension is not commonly included as standard. 

Standard commercial insurance policies provide cover against a wide range of risks, including damage caused by fire, flood, losses by theft, and the need for temporary trading premises in certain circumstances (following severe flood or fire).  

An adviser or broker will work with the business and advise on the best policy to suit their needs. Some business may have cover in place that specifically provides cover for contingency business interruption arising from notifiable diseases, such as coronavirus, where their premises have been contaminated, but this is not common.

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

  • Insurance for business interruption resulting from Covid-19 is likely to be rare.  Businesses who are concerned about the impacts of Covid-19 should check the scope of their cover, and check with their insurance adviser or broker. Standard business insurance policies are designed and priced to cover standard risks and are therefore unlikely to provide cover for the effects of global pandemics like Covid-19.
  • Businesses may have chosen to purchase cover that will specifically provide for business interruption arising from ‘notifiable diseases’.  However, 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 may not apply.
  • Some notifiable disease extensions are more general and do not specify certain diseases.  In these cases, business interruption cover for Covid-19 may apply if Covid-19 is present in the business.  If you are unsure about what your policy covers your business for, check with the broker you purchased the policy from or your insurer if you purchased it directly.

Are there any other extensions to business interruption that may provide cover?

  • Some coverage may exist if the business has purchased a ‘non-damage, denial of access’ extension to a business interruption policy.  Again, purchase of these extensions tends to be rare and this is not generally covered under standard business interruption policies.
  • Generally, ‘denial of access coverage’ applies to cordoned off areas and loss of trade resulting from a denial of access to the premises (e.g. as a result of a police cordon).  If a business is forced to close or is told to close by an appropriate authority or is cordoned off, this could trigger a claim under a ‘non-damage, denial of access business’ interruption extension if the infectious disease cover is unspecified or if it includes Covid-19.

Will my home insurance policy be affected if I have not told my insurer that I’m working from home?

  • Working from home, due to the need to self-isolate should be covered by standard home insurance policies, assuming that the work is clerical in nature.
  • If individuals are working from home and receiving visitors to their home on business matters, they should check with their insurer. In some cases, there may be some restrictions in cover such as loss of money and theft being excluded unless there is evidence of forcible and violent entry to the property.
  • The business equipment used (e.g. Laptop) is likely not covered, however in most cases we would expect the employer to be liable for ensuring their equipment is insured away from the office.

Will home insurance cover the cost of a deep clean to my property should it become contaminated by COVID-19?

  • Most standard home insurance policies do not provide cover for the costs of cleaning a property.  However, there could be some cover in some policies who have Accidental Damage extension on an all-risks insurance policy.  This however will be subject to terms and conditions, for example, some policies only cover visible damage.  People should check with their insurer if they are unsure.

If you have any doubts regarding your insurance cover we suggest making contact with local insurance providers for clarity.

 

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