COVID-19 FAQ’s – How Will My Insurance Programme Respond?

As information and updates on the evolving developments of COVID-19 (Coronavirus) are communicated by authorities, the pandemic is causing significant disruption and impact on society and business alike.

Whilst expert coverage and advice in circulation across the media is naturally focused on preventative and delaying measures to limit the impact of the pandemic on society, for many businesses this is a very challenging time with the pandemic now actively disrupting economies and businesses worldwide. This is an unprecedented time which is causing some uncertainty with organisations and businesses regarding whether their insurance programme will respond if COVID-19 causes significant disruption to their operations.

Will my insurance programme respond if my business suffers a disruption or incurs losses as a direct or indirect impact of COVID-19?

Each insurance programme is unique to the organisation or business it is designed to protect. Insurance policies are typically developed with a combination of standard and bespoke protections that can be added to meet the unique risks for an organisation or business. Protection against the impact of infectious diseases can be part of an insurance programme but it is not always included as standard so it’s important that you carefully review the insurance policy which is in place specifically for your organisation or business.

If you are a Griffiths & Armour client, we continue to encourage you to speak directly to your dedicated insurance broker, especially if you have any questions relating to COVID-19 and your individual insurance programme. We are ready to provide you with guidance and clarification on your policies and how they will respond to the issues you are experiencing.

Over the last few weeks we have listened to our clients questions and provided answers and guidance in relation to their insurance programme and COVID-19. We would like to share some of those frequently asked questions and we hope these FAQ’s provide some clarity. However, as recommended above, if you would like to get in touch with us to discuss your specific requirements, contact your insurance broker at Griffiths & Armour or simply click on the ‘CONNECT WITH AN EXPERT’ button below and a member of our insurance broker and risk management team will get in contact you shortly.

Read Frequently Asked Questions / Answers;

I own a chain of retail shops and have over 50 members of staff. If I have to shut some or all of my stores, will my insurance respond to the losses my business will incur?

Whilst some Business Interruption policies will include an extension for Notifiable or Infectious Diseases, wordings do vary and not all will provide protection. Of those that do, some list specific diseases, while others refer to any diseases notifiable under the Health Protection (Notification) Regulations 2010, for example. When COVID-19 was added to the list of notifiable diseases, policy coverage did not change. If you have any doubt or are unsure about whether your insurance includes this extension get in touch with your insurance broker who will be happy to check and confirm for you.

My business operates on a shared site (offices, retail park or shopping complex). If the decision is made by the owners of the site to close the facilities due to COVID-19, how will my insurance respond to the losses my business will incur?

Your Business Interruption cover may include an extension to cover loss resulting from interruption or interference with the business as a result of notifiable/infectious diseases. Different policies include different wordings related to notifiable/infectious diseases and although COVID-19 is now registered as a notifiable disease, policies have not changed. If your activities were interrupted at your own premises due to a notifiable disease and the relevant authority prevented you from working or forcibly closed the location, then there may potentially be cover. If you are not sure about whether your insurances extend to cover this, speak to your insurance broker as soon as possible to check your policy.

If a member of my team contracts COVID-19 on our work premises, can I be held liable for damages or loss of earnings by that employee? If so, what insurance policy will protect me and my business?

Your organisation has a duty of care to its employees to ensure that their working environment (both within company premises and at 3rd party locations that employees are attending) is safe. Your Employers’ Liability cover responds in respect of your legal liability (as employer). However, it would have to be proven that the employer has not taken reasonable precautions to prevent the spread of the disease. So, as an employer it is important to ensure that you have a business contingency plan in place, have tested it and where appropriate, implemented the risk management measures to mitigate / prevent the spread of the virus.

A crucial supplier in our supply chain has failed to deliver stock to my business, citing staff absences due to COVID-19 and issues further up the chain from their suppliers in similar circumstances as the reason for the stock issue. As a result, I am unable to supply my customers and meet my contractual obligations. Which of my insurance policies will protect me and any losses incurred by my business?

Business Interruption policies may include a supplier’s extension, however this will generally only respond when there has been physical damage at the supplier’s premises and is highly unlikely to respond to notifiable diseases. If you have any doubt or are unsure about whether your insurance includes this extension contact your insurance broker who will be happy to check and confirm for you.

We are attending a trade show in Germany next month which involves exhibiting at the show which includes incurring staff travel and hotel costs. If we decide the risk to the welfare of our staff is too great to attend and choose not to attend, will our insurance cover our costs?

Your travel insurance may respond to cover the travel and hotel costs; however, most policies will exclude disinclination to travel, which means if there are no travel bans and the decision is yours alone, your insurance may not cover the costs. Ultimately, each case is being considered on its own merits and it is likely to depend on when the trip was booked and what the Foreign & Commonwealth Office travel advice is regarding travel to the area. More generally, the situation regarding travel overseas is changing daily, so we recommend that you get in contact with your insurance broker for further guidance.

I am an event organiser for a not-for-profit organisation. We have several fundraising events planned in 2020 ranging from small events of 50 people to large events with many thousands. Will my standard insurance policy protect me if the authorities take the decision to cancel all public events or large gatherings?

Communicable Diseases are a standard exclusion from the standard Cancellation Insurance policy. Notifiable Disease extensions to Business Interruption policies generally refer to the closure of the insureds premises, not third-party premises such as concert venues or public parks that host festivals. A Cancellation policy may respond, if a Communicable Disease extension is included, however make sure you check your policy or get in touch with your insurance broker to check as this extension rarely comes as standard on a policy.

My business supplies goods and services for events in the UK and internationally. If those events are cancelled, will my insurance policy cover my business for stock that is no longer required or loss of income?

If there is a Customers extension to your business interruption policy, this is likely to respond only when there has been physical damage at the customers premises and is highly unlikely to extend to notifiable diseases. Your insurance broker is on hand to explain what your policy includes so get in touch as soon as you can if you require clarification on this aspect of your policy.

In my capacity as a designer, my client is holding me responsible for project delay because two of my senior technical staff are stranded abroad due to COVID-19 which affected our operations. Does my Professional Indemnity insurance policy protect me?

If you have Professional Indemnity insurance, it provides indemnity in the usual way for any claim against you in the event of liability arising out of your professional activities. That has always extended to circumstances where a failure to deliver on time has caused delays and associated losses.  The reason why you failed to deliver and meet contractual obligations is usually irrelevant for policy purposes, subject only to express exclusions none of which are relevant to this scenario.

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