The Association of British Insurers (ABI) has sought to clarify the situation with business insurance and the coronavirus pandemic, following the government’s press conference yesterday.
UK Prime Minister Boris Johnson advised “everyone to stop non-essential contact with others and to stop all unnecessary travel.”
“We need people to start working from home where they possibly can. And you should avoid pubs, clubs, theatres and other such social venues.”
This advice has led to substantial concern among affected industries, with Kate Nicholls, chief executive officer of UK Hospitality, saying: “This is catastrophic for businesses and jobs. The government has effectively shut the hospitality industry without any support, and this announcement will lead to thousands of businesses closing their doors for good, and hundreds of thousands of job losses.”
“Over the past few weeks the industry has suffered unprecedented drops in visits and many business are already on their knees. This latest advice leaves the industry in limbo, with no recourse to insurance.”
Following the press conference yesterday and several statements such as UK Hospitality’s, the ABI issued a statement to clarify where insurers stood and what business insurance policyholders would be able to do.
A spokesperson said: “Irrespective of whether or not the government orders 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.”
“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.”
The ABI has put together a Q&A on the impact of coronavirus and what insurance policies may cover.