The Association of British Insurers (ABI) has provided further guidance on the provision of business insurance during the coronavirus pandemic (Covid-19), after the UK government clarified its own position.
The ABI reacted on 17 March, after Prime Minister Boris Johnson advised the general public to “avoid pubs, clubs, theatres and other such social venues”, and affected industries warned that without an enforced closure, they’d be unable to claim on their commercial policies.
“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,” an ABI spokesperson said in a statement.
But the government later clarified that insurers would still cover claims without enforced closure, prompting the ABI to update its statement, in which the insurance association called the spread of coronavirus “unprecedented in modern times”. An ABI spokesperson continued: “[W]e understand this is an incredibly difficult time for families and businesses.”
“Standard commercial insurance policies—the type the vast majority of businesses purchase—provide cover against a wide range of day to day risks including damage caused by fire, flood, theft and accidents involving employees.”
“Insurers pay out £22m each day to firms through these policies, supporting millions of businesses across the UK each year.”
“Only a very small minority of businesses choose to buy any form of cover that includes local closure due to an infectious disease.”
“An even smaller number will have cover enabling them to potentially claim on their insurance for the presence or impact of the coronavirus pandemic. The government’s clarification yesterday will help some of these policyholders claim if the other terms and conditions of the policy are met.”
“We strongly recommend that every business should check with their insurer or broker if they wish to confirm the type of cover that they have purchased.”