Coronavirus, is my business covered?

19 March 2020

The Global spread of Coronavirus has had such a rapid impact, we are yet to understand its long-term implications for businesses. The insurance industry is working hard to respond to this unprecedented challenge. E G Murray are here to support and address your concerns.

As your broker, we understand that your business has many concerns and uncertainties in the months ahead. There has been a lot of misleading statements in the media in recent weeks, we aim to provide some clarity:

Does my Business Insurance policy provide cover for Coronavirus?

In response to the pandemic E G Murray are reviewing a broad range of insurance policies and from wide variety of insurers. Additionally, every business is unique, and as a result no two business insurance policies are the same. Although business insurance policies are designed to protect against a wide range of risks, these do not generally include unpredicted events which are both globally significant and having such major financial implications, such as the Coronavirus (Covid-19) pandemic. 

We have however identified some insurance policies where the Business Interruption section of their policy may provide cover our customers, but will depend on specific circumstances and be considered on a case by case basis by insurers. We are doing our best to contact customers directly where this be the case. Your patience is greatly appreciated whilst make progress with this.

What is Business Interruption insurance and how does it relate to Coronavirus?

Business Interruption (BI) insurance is an additional cover to a Business Insurance policy. Businesses typically have it in place when they are reliant, to an extent, on their premises to trade. It is designed to cover unpredicted events which disrupt your business. This can be a result of a number of named perils such as flooding, fires, lightning strikes or the failure of equipment.

BI cover is typically triggered where tangible insured property has been damaged (building or contents), with the interruption being a consequence of the damaged property. Such damage is unlikely to be a consequence of Covid-19.

Some BI covers the contamination of a workplace with an infectious 'Notifiable Disease', but these tend to be listed specifically and therefore will not include the newly identified Covid-19. In addition, the virus itself is not the immediate risk that most businesses are facing - the biggest threats posed by the Covid-19 outbreak are of an abstract, wide-ranging and constantly shifting sort that is not included in typical BI cover.

Some BI covers include restricted access or denial of access cover which are intended for events such as the closure of an area by police due to terrorism or other property damage losses.

BI insurance aims to mitigate the losses sustained in these types of events by covering Increased Cost of Working (ICOW) and/or Loss of Profits/Turnover, putting you in the same financial position had the loss no occurred. However no BI cover is designed to guarantee continued profit, but to help the business recover in the short term.

The outbreak of Covid-19 has resulted in the most widespread interruption to businesses in the UK since the Second World War, but the unfortunate fact remains that BI simply was not created with this sort of pandemic in mind. This cover is designed for a predefined set of risks and priced accordingly - if it were to cover all unpredictable eventualities, the cost of insurance would be considerably higher.

Can I switch to a policy that will provide cover for Coronavirus?

Insurers, like all other business, are facing financial uncertainty at this time. Those insurers where their policies may provide BI cover for Coronavirus are having to take steps to minimise their losses. As such, their response has been to either exclude Coronavirus specifically or Notifiable Diseases in general, for all new business or renewal quotes.

If my business is shut down by the Government, does my Business Insurance cover this?

The Government’s guidance so far has been worded in a specific way which keeps them broadly advisory. By encouraging the public to stay indoors and self-isolate, the Government has effectively stalled the day-to-day operation of many companies without going as far to close them down.

This makes questions around insurance and Government enforced shutdowns particularly complicated at present. Not only is it still highly possible that businesses could be shut down by the Government over the coming weeks and months, but if this does happen it is still highly unusual for BI to cover interruptions of this type. It will be dependent on your specific policy wording and we will do our best to advise you where this be the case.

What should i do now? 

E G Murray are here to support you and your business through this incredibly challenging period. Our priority is to help and advise you as the Covid-19 situation continues to rapidly and unpredictably develop. As soon as we know more about the insurance industry’s response to the pandemic, we will update you accordingly.

Where your Business Insurance contains wording that may provide cover for Coronavirus, we are working hard to get in touch directly and we appreciate your patience whilst we make progress with this.

To help ensure the safety of our staff and others we will be working remotely where possible.

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Please contact your Account Manager directly as and when needed.

We would encourage you not to visit our office for everyone's safety.