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    Covid-19 – Insurance and Potential Business Interruption


    Solicitor Richard Raban-Williams discusses the impact of Covid-19 on businesses, and the possible implications for insurance policyholders.

    As the scale and severity of the coronavirus outbreak continues to increase, few can be under any illusions as to the impact the pandemic will have on the UK’s economy. In particular, the adverse consequences for UK businesses has garnered much attention in the press and social media. The package of financial measures recently announced by the government (which includes £330bn in loans, business rates relief, and grants in certain sectors) will undoubtedly be welcome. However, the ultimate impact on the economy, employees, and business owners remains to be seen.

    Businesses are already turning to their insurance policies in light of decreased revenue, staff sickness and isolation, and disrupted supply chains caused by Covid-19. The million-dollar question is, are such losses are capable of recovery?

    There is no single answer to this question; each policy will need to be considered on its own terms. Whilst typical risks, such as fires and floods, will almost certainly be covered, it is less likely that most businesses will have purchased cover which provides for viruses and diseases. Nevertheless, it is crucial that businesses who are, or may be, affected by coronavirus review their policies promptly to ascertain the extent of any cover.

    Unfortunately, standard policies are unlikely to cover for pandemics such as Covid-19. It is possible, however, for consumers to have purchased extensions to cover which will afford protection in cases of business interruption due to notifiable or infectious diseases. Encouragingly, the UK government designated Covid-19 as a notifiable disease on 5 March 2020. Even so, policyholders with extended cover will still need to check their policy with care. This is because the notifiable diseases which are covered may be specifically listed in the policy. If this is the case, then it is extremely unlikely that Covid-19 will be included. However, a widely defined extension that addresses diseases generally might result in cover being afforded. Of course, it is necessary in all instances to consider all conditions which need to be met for a claim to be made under the policy. Again, the advice must be for businesses to check all of their insurance policies carefully to assess the extent of their cover, if any.

    Of course, it is not just businesses being affected by the outbreak. Individuals with travel, home, motor, income protection, and even wedding insurance will all be looking to their policies to see what protection is afforded. Whatever the type of insurance, the advice remains the same; check the wording of your policy promptly.

    In all instances, whether it be consumers or businesses, policyholders in any doubt are advised to make contact with their brokers and/or insurers to discuss the extent of their cover. 

    Should you need any advice relating to insurance policies, whether affected by COVID-19 or not, or have any questions regarding the above information, please do not hesitate to get in contact with Richard Raban-Williams at   

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