Small Business Resilience for Coronavirus

First published 20/02/2020

Last updated 11/05/2020

The impact of the coronavirus has been severe, with restrictions having a mounting knock-on effect on the worldwide economy.

Proactive insurance considerations for your business and employees

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, 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. Your existing policy wording may include some work-away cover, but we advise you to check that your policy covers business away from premises whether that’s your liabilities or your motor insurance.

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. Many insurers are extending their unoccupancy clauses, but they should still be notified. If you are taking out a new policy, you should declary any unoccupancy to your new insurer too.

For tips on preventing damage to unoccupied property, you can read our blog here.

A leading cyber insurer has previously said that 80% of cyber claims come from remote workers, who can be more vulnerable to different cyber security threats. We recommend ensuring your staff are trained to reduce the risk of cyber-crimes. This doesn’t need to be a daunting topic, and we have outlined some suggestions to cover with your employees.

Spotting phishing emails can be difficult as criminals are increasingly dressing their emails and using sender names to look just like the real company that they’re imitating. The purpose of these emails is to get you to click on a link that intends to trick you into sharing login information. A simple way of preventing this is encouraging staff never to click links to go to log in pages, but instead going to the website through their browser. This way they are not running the risk of following a dodgy link to a criminal’s website.

Staff who handle requests for money or data should follow due process to ensure the requested funds/data is going to an appropriate person. This can include requesting answers to data protection questions to verify a person’s identity, or asking for written permission from the account holder.

Passwords should be secure (and not shared across profiles) for work, ideally with multi-factor authentication for remote workers. This reduces the risk of criminals accessing staff accounts using leaked or unsecure passwords.

If your staff use webcams at home, it is advised to have them covered, unplugged or turned off when not in use. If they use any wi-fi enabled home security cameras, make sure they change their passwords from the factory settings to prevent hackers watching them via livestream.

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.

illness

Might I have cover?

The FCA sent a “Dear CEO” letter to insurers on the 15th Apil, asking that insurers assess and settle COVID-19 claims quickly, and FCA are taking the unprecedented step of reviewing policy wordings themselves to get a Court ruling on those with significant uncertainty about cover.

The Association of British Insurers (ABI)  released a statement on 29th April in response to 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.

domestic cleaner

If you’re wondering if you have cover, 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. If 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. 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. If the policy wording lists specified diseases covered, then you will need to ask whether COVID-19 is included.

If you believe that you have adequate cover and your insurer is disputing this, FCA are still recommending that SMEs (with less than £6.5m turnover, less than 50 employees, less than £5m balance sheet with a claim for less than £355,000) go to the Financial Ombudsman Service for a quick response rather than going down a possibly time-consuming/costly and lengthy legal route. FSB are lobbying FOS for a quick and fair turnaround for members who refer to them.

Business Continuity Planning To Mitigate The Potential Impact Of Coronavirus

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.

woman behind closed shop sign

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.

  • Business Continuity Planning helps your business survive a major disruptive event
  • Business Continuity Planning can help your business recover from uninsurable threats
  • Build timescales to ensure your IT gets back on track as quickly as possible in case of major disruption
  • Coordinate emergency response with your business recovery at the same time in case of a dangerous event
  • In case your business can no longer operate from your premises, your facilities managers will have a plan in place to either relocate or rebuild quickly
  • Finally, getting up and running again soon after an sends a powerful message to your customers, reassuring them that they will never be left uncertain or under-supplied if the business suffers disruption

How do we get "back to business"?

After the Prime Minister's recent statement, we have also released a guide for preparing your business to return to its premises after lockdown. You can read this here.

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.