Business interruption insurance or business income insurance is protection in the event of a disaster that results in a loss of income. Revenue lost due to a disaster related incident, for instance, may be due to a business having to close. Initially, this sounds like a life-line for business who have this protection within their policies who are suffering from the economic disaster coronavirus COVID-19 is inflicting upon them.
As the Coronavirus COVID-19 disaster uncompromisingly progresses, aside from the tragic numbers of fatalities, the economy is deteriorating at an alarming rate. From global companies to local retailers, financial doom appears like an inevitability, certainly without swift governmental intervention. Thankfully, there does appear to be several schemes and relief mechanisms for businesses, for which the British Government are currently legislating. Details of these can be found here.
Businesses who have business interruption insurance clauses may also be turning to their insurers during this disaster. Coverage among other things include lost profits, fixed costs, re-location and additional expenses.
Russell and Company Solicitors have one such Business Client. Our Client enquired through their broker about making a claim, only to be informed he was not covered. The broker initially stated that coronavirus was not a notifiable disease with the insurers, therefore there would be no cover in the event the business had to close. The insurers followed up, specifying they do not include cover for coronavirus, notifiable or not.
At 6.15pm on 5 March 2020, the Government took urgent steps to list coronavirus as a notifiable disease in law, by the addition to the Health Protection (Notification) Regulations 2010.
Human coronaviruses were first discovered in the 1960’s. Seven strains of coronavirus are now known, including the SARS-CoV which causes SARS, responsible for almost 800 deaths across 17 countries in 2002/3. The latest version being SARS-CoV-2 which causes the COVID-19 disease.
It is undeniable that coronavirus, health and work are inextricably linked. Russell and Company Solicitors, along with Senior Counsel are examining the merits of the position taken by both the Insurance Broker and Insurer in relation to not providing business interruption insurance for our Client. Given the nature current crisis, we will be exploring all legal avenues as a matter of urgency.
We would be keen to hear from any businesses who appear to have business interruption insurance, but are having issues making a claim, or have been told by their Broker / Insurer that they are not covered.
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