Insuring Against COVID-19.
It’s safe to say that we’re in the midst of one of the most difficult times small businesses will have ever faced. What makes things worse is that business owners have no idea where they stand with their insurance carriers.
As there are a lot of questions currently circling the insurance industry at the minute, I thought it best to provide an update on the current situation. I’ve done this as a breakdown of each policy heading (Liability Insurance, Travel Insurance, Cyber Insurance etc.) Which I’m hoping will answer any questions you have, but please do message back with questions I haven’t answered.
Public Liability: Most (if not all) insurers are covering claims brought against you or your employees where a third party sues you for breach of duty resulting in unintentionally infecting them with coronavirus.
Employers Liability: Same rules as above, however it is very important to note that you have a duty of care to your employees, which if breached, may cascade in to a directors & officers claim (noted below). Under the employers liability, there will also be cover employees working from home.
There is some handy guidance information for employers here:https://www.gov.uk/government/news/coronavirus-covid-19-guidance-for-employees-employers-and-businesses
Many big name insurers have now suspended their travel insurance policies until further notice. Aviva being the most notable. Most travel insurance providers that are still offering insurance, will be adding or quoting with a clause excluding cover for coronavirus moving forward – so please keep this in mind before booking trips.
Cancellation of trips will be covered under existing policies, providing that the FCO have advised not to travel to the country you are visiting.
Medical, isolation and repatriation expenses will be covered should you or your employees contract coronavirus whilst away from the UK. (providing there isn’t a coronavirus exclusion on your policy)
Business Interruption, Loss of Income, Employee Wages:
Most insurers have now announced that they will NOT be paying claims for business interruption relating to Coronavirus. The standard market stance is that Coronavirus is not a “specified disease” under their policy wordings, nor does it relate to property damage. There was reason to suggest that business interruption claims would be met should your premises be shut down by the government or local authority. That has now been clarified and most insurers will not be paying.
We understand that the UK government is in negotiations with the UK insurance industry to try and come to a conclusion. We will post more information as we get it.
There is no cover under an insurance policy for loss of employee wages during this time, however the government have put in place a scheme to cover SSP or offer support with this for all small businesses. (link below)
If you believe that your business is going to be significantly affected and you are worried about significant losses, the government have released a scheme for small businesses. You can read about this and apply for grants/loans here: https://www.gov.uk/government/publications/support-for-those-affected-by-covid-19
We are still working with insurers to establish whether there is any impact to your professional indemnity insurance following the coronavirus outbreak. We understand that there may be impact to certain service level agreements that you have with your customers. It is very important that you manage their expectations during this period and keep the lines of communication open. Throughout each of your contracts with your customers, there may be certain exemptions for “circumstances out of your control” for the service that you provide. I would encourage anyone worried about this to speak with their legal advisors in the first instance.
Directors & Officers Insurance:
This will cover the directors for any claims against the directors for decisions that they make. Your decisions as directors are likely to be tested during this period. Businesses with directors & officers insurance that extends to employment practices liability will have cover in place for health & safety claims from your employees.
If you do not have directors & officers insurance, it is a fairly cheap addition to your insurance portfolio – so I would highly recommend purchasing where possible.
Portable Equipment and Employees Working From Home:
Should you have portable equipment cover under your insurance policy, this will cover items that employees take home to do their work. This includes travel to and from their home to other places of work. As mentioned above, your liability cover will extend to cover this too.
Please ensure that any employees working away from the office do so on a secured WIFI connection. Using public/free WIFI isn’t that secure and remote logins are a big target for hackers.
Please be particularly vigilent during this period, as we have had reports of hackers using COVID-19 phishing emails.
Invoice Finance and Credit Insurance:
Whilst not directly related to COVID-19, these policy’s could be a lifesaver for your business. We have already started to see large organisations delaying the payment of large invoices, by way of making sure their bank balance is well stocked during this uncertain period. It’s possible for your business to take out invoice finance or trade credit insurance to cover any unpaid invoices. Please get in touch if you’d like pointing in the right direction here.
Diseases are covered as standard under life and medical insurance policies. Thankfully this one is really straightforward!
We are trying to keep everyone updated as much as possible, so we will post/share further communication over the coming weeks.
Please do not hesitate to get in touch if we can do anything further. Best wishes from all at ETR.