March 17, 2020
On March 5th 2020, the UK Government added Coronavirus (COVID-19) to the list of notifiable diseases and SARS-COV-2 to the list of notifiable causative agents.
This change was made by adding them to the Health Protection (Notification) Regulations 2010. Although the UK Government have made this decision, the impact on insurance policies is not automatic and there is no change to the cover currently provided.
Businesses will be concerned with the potential financial impact that Coronavirus will have on their business and these are unprecedented times. We have outlined below how your Business Interruption, Public Liability and Employers Liability policies will respond.
Business Interruption insurance (BI) provides cover for the financial losses due to an interruption or interference to the business subject to the sum insured and terms, conditions and exclusions of the policy. This section of cover is principally triggered following damage caused by an insured peril (for example, fire or flood).
There are some BI policies where cover will respond in the absence of damage to your premises, such as a Notifiable Disease or Specified Illness extension. These diseases/illnesses are generally listed within the policy wording and tend to follow the list of the diseases outlined under Health Protection (Notification) Regulations 2010; however, they may not be identical. Although, the Government have added Coronavirus to the list, this does not mean insurers will automatically do the same. Also, for cover to respond, the premises must be restricted in consequence of the actions or advice of a competent Public Authority, due to an emergency likely to endanger life or property, in the vicinity of the premises. Not all insurers have declared their position, however, the general stance has been that they will not be looking to extend their cover to include Coronavirus.
A Public Liability (PL) policy provides an indemnity to the Insured for legal liability to third parties for damages in respect of accidental bodily injury, death, disease or illness, and for any loss of or damage to property, which happens in connection with the business insured under the policy and occurs during the period of insurance, subject to the limit of indemnity and terms, conditions and exclusions of the policy. With regards to a potential Coronavirus (COVID-19) claim under a PL policy, the PL policy would respond and look to defend any action brought against the Insured and in the event of the Insured being legally liable, the policy will indemnify the Insured subject to the limit of indemnity and terms, conditions and exclusions of the policy.
An Employers Liability (EL) policy provides cover for any sum which the employer may be legally liable to pay to any employees in respect of injury, disease, illness or death caused during employment in the business of the Insured subject to the limit of indemnity and terms, conditions and exclusions of the policy. With regards to a potential Coronavirus (COVID-19) claim under an EL policy, the EL policy would respond and look to defend any action brought against the Insured and in the event of the Insured being legally liable, the policy will indemnify the Insured subject to the limit of indemnity and terms, conditions and exclusions of the policy.
Whilst the current position may appear negative, this is an unprecedented situation. Insurance is based on fundamental principles and insurers assessing the risk proposed to them and charging a premium that reflects their liability to that risk occurring.
Insurance does not cover global issues such as war and emerging diseases such as Coronavirus as these risks are too large for the insurance industry to cover. If they were to cover these, the premiums they would have to charge would be uneconomical due to the uncertainty and severity of the risks.
The UK Government are trying to assist with the situation and have announced in the Budget on 11th March 2020, that a new Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will enable businesses with a turnover of no more than £41 million to apply for a loan of up to £1.2 million, with the government covering up to 80% of any losses with no fees. This will unlock up to £1 billion pounds to protect and support small businesses and should be available in a matter of weeks.
For businesses with fewer than 250 employees, the cost of providing 14 days of statutory sick pay per employee will be refunded by the government in full. This will provide 2 million businesses with up to £2 billion to cover the costs of large-scale sick leave.
A dedicated helpline has been set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs. Through this, businesses may be able to agree a bespoke Time to Pay arrangement. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.
There will be a £3,000 cash grant to 700,000 of the smallest businesses, delivered by Local Authorities, and worth a total of £2 billion.
Finally, the government is temporarily increasing the business rates retail discount in England to 100% for 2020-21 for properties below £51,000 rateable value. Nearly half of all business properties will not pay a penny of business rates.
The above information has been taken from:
We have attached a document produced by the Government that outlines this in more detail and provides details about obtaining more information on Coronavirus support. In addition, we have attached a couple of additional World Health Organisation leaflets which we are using internally, and you may find these of use in the future.
We would recommend that you check the following link for updates from the Government in respect of their guidance to employers and businesses.
This situation is unfamiliar to everyone and we would recommend that you contact Flint Insurance if you have any concerns or queries regarding your insurance and we will be happy to assist where possible.