In these unprecedented times, when life as we know it has been turned on its head, as in any loss situation, those prudent businesses who have diligently paid for Business Interruption Insurance cover understandably look to that cover to compensate them for their losses. Since the COVID-19 tsunami has hit our shores with an unforeseen magnitude, leaving businesses literally blown apart in its wake, I have been approached by many desperate business owners incredulous that the cover they purchased appears not to cover them in their hour of need.
Although the Government has helpfully now designated COVID-19 as a notifiable disease, most business interruption policies specifically define notifiable diseases, which means that COVID-19 will not be covered.
There are, however, some policies where notifiable diseases are not specified or the definitions have some flexibility within them. Under this form of wording, as COVID-19 is now a notifiable disease, business interruption losses arising as a direct result of the disease are likely to be covered.
Also, some policies will contain a denial of access extension clause, which will typically cover a business forced to close as many have now been (and even more now as the Prime Minister has closed all but essential businesses). Claims may be possible under this extension, so long as there is no requirement for a damage trigger.
So to answer the above question, COVID-19 Business Interruption Insurance cover is not fiction, although it is only likely to be available in some limited instances where cover is less restrictive. It is, however, worth a good, careful look at the terms and conditions and do not be put off by some of the references to blanket denials of coverage that have been circulating in the press. Your business could be one of the ‘lucky’ ones…
If you have any questions relating to your Business Interruption Insurance please contact Marie-Claire di Mambro using the details below.
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.