COVID-19 and Insurance Claims

Given the broad impact of Covid-19 on a range of businesses and sectors, a number of policies may be potentially relevant, some of which are noted below.

• Business Interruption - provides coverage for loss of profits and increased costs of working. It is typically found in property policies and triggered by property damage, but some non-damage extensions are available.
• Trade Credit - provides coverage for late or non-payment of debts. Policyholders should ensure they are adequately protected against insolvency events involving the third parties they contract with. It is also important to think about how your policy will respond before agreeing to any changes to a contract suggested by the other party.
• Event Cancellation - careful consideration should be given to whether coverage is available for voluntary cancellation (e.g. lack of sales) or if it is only available where cancellation is imposed by a relevant authority.
• Liability Insurance - for potential third party exposure. Businesses should consider their potential liability to their employees or other third parties.

• Lack of property damage - Although standard BI policies are unlikely to afford cover due to lack of damage to insured property, potential cover may be available through non-damage extensions such as notifiable disease or non-damage denial of access.
• Check policy terms - Policyholders should take steps now to check their insurance policies for relevant coverage and to ensure compliance with policy terms.
• Limits of cover - non-damage covers tend to have lower limits of cover and potentially shorter Maximum Indemnity Period.
• Exclusions - need to be reviewed and potentially relevant exclusions should be considered as should the risk of exclusion.

Are losses recoverable? The majority of standard BI policies are unlikely to respond to Covid-19, but some policies may. If non-damage cover is included in your policy we recommend speaking to your broker or a specialist insurance lawyer who can advise on the chances of recoverability. It is also important to notify your insurer of a potential claim.