First published 20/02/2020
Last updated 31/03/2020
The impact of the coronavirus has been severe, with restrictions having a mounting knock-on effect on the worldwide economy.
As tens of thousands of workers make the change to work from home, some with new equipment, we would typically advise everyone doing so to make sure that their home insurance providers are made aware. The ABI, however, recently released a statement declaring that their members had agreed home and car insurance policyholders would not need to notify ABI insurers of the changes to their work situations, as part of industry efforts to help mitigate the impact of coronavirus COVID-19. If you are working from home and want to notify your insurer in order to cover your bases, this will likely not impact your premiums.
If you normally work from premises and are now relying on deliveries/working away, or if you’re now using your personal car for deliveries we would advise you to let your insurer/broker know. As per the ABI’s statement, insurers are taking a sympathetic view to these types of mid term adjustments.
If your business is sending employees home, temporarily closing or working from a reduced number of sites, you will have premises which are unexpectedly empty. Empty premises are vulnerable to a few, perhaps unexpected risks.
Your policy will likely have a clause in it to protect against your premises being empty for short periods, but since you may have to vacate the property for longer, you will need to let your insurer/broker know and this may involve making a mid-term adjustment on your policy.
For tips on preventing damage to unoccupied property, you can read our blog here.
FSB Insurance Service is a member of BIBA (British Insurance Brokers Association) who are lobbying for insurers to take an understanding view on the changes in situation for many business owners, to ensure that cover is available and changes in premium are minimal.
The Association of British Insurers (ABI) has released a statement in response to recent statements by the Chancellor:
“Irrespective of whether or not the Government order closure of a business, the vast majority of firms won’t have purchased cover that will enable them to claim on their insurance to compensate for their business being closed by the Coronavirus.”
“Standard business interruption cover – the type the majority of businesses purchase - does not include forced closure by authorities as it is intended to respond to physical damage at the property which results in the business being unable to continue to trade.”
“Every policy wording is different and the extensions to cover that may include pandemic situations are optional covers and also very in their application. We will do what we can to add clarity.”
“A small minority of typically larger firms might have purchased an extension to their cover for closure due to any infectious disease. In this instance an enforced closure could help them make the claim, but this will depend on the precise nature of the cover they have purchased so they should check with their insurer or broker to see if they are covered.”
You can read more on ABI's coronavirus information hub here.
Firstly, you need to check your policy wording, or contact your broker to find out if you have Business Interruption cover in your commercial insurance policy.
Standard Business Interruption is provided for consequential loss of income or the additional cost of working following (mainly) physical damage to buildings and contents. Some policies extend that cover, often in a very limited way, to provide for certain events which might impact use of the premises
Once you have confirmed that you have Business Interruption cover, you will need to check whether you have an extension for “notifiable diseases” (can also be referred to as “Infectious Diseases”). This extension is not common. If the policy wording lists specified diseases covered, then you will need to ask whether COVID-19 is included. As this worldwide pandemic is now touching every business and household in the UK in some way, if you are not currently covered, it is highly unlikely that you will be able to get your policy extended to include it at this time.
The UK government has now declared coronavirus (COVID-19) as a notifiable disease. Standard policies are highly unlikely to include any protection if your business suffers due to an outbreak of disease, regardless of circumstance but, it’s worth checking your policy wording to see if you have the extension in place.
Below is a brief video in which FSB Insurance Service's Managing Director details our current advice for businesses.
Registered members of FSB Insurance Service have access to free business continuity planning kits and discounted business continuity planning software. It’s possible, using these, to create a plan for how your business will continue to operate if affected by illness and disease.
Business Continuity Planning (BCP) is best described as the planning and preparation that will keep your business afloat during any operational emergency.
You will identify all potential risks you’re likely to face and understand how to keep operations running in each scenario. As well as protecting your business, this is a good way to truly understand your business and the information you uncover will be useful to have to hand when it comes to getting quotes for insurance too.
There is no standard response. Your business is complex with many highly interconnected and synchronised components known only to you, so rebuilding it (whilst continuing to operate) is rarely easy or straightforward, even with help.
If you have any questions, or would like to discuss your insurance with an advisor, please feel free to call our team on 020 3883 7976. Our lines are open Monday-Friday 9am-5.30pm excluding bank holidays.
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