Ashburnham Insurance Services Ltd

As more and more UK businesses seem to be reopening after the COVID-19 lockdown, there’s one topic on everyone’s minds – does my insurance policy cover business interruption? No matter how well covered a business might be, the governments arguable lack of clarity in recent months has led to some business interruption policies not covering the disruption. If you and your business are currently experiencing a lack of clarity, we’ve compiled an update as to what is currently going on, and what you can do to protect your business in the case of a second wave.

Bringing Clarity to an Unclear Situation

If you’ve been paying attention to the ongoing debate about business interruption insurance (BI) you may already know that the FCA has brought a test case on business interruption insurance in an attempt to bring legal clarity to a seemingly unclear situation. This has come about after insurers have found complexities in the wording of not only the policies but in the way that the government has implemented the lockdown, meaning they have subsequently turned down claims as a result. 

The case aims to provide clarity to both insurers and businesses as to whether their policies should cover business interruption as a result of COVID-19 or not. This is due to the fact that many BI policies are designed to cover disruption following damage to property that results in loss of revenue due to a pause in business activity. Some policies or cover extensions may cover non-physical damage such as infectious or contagious diseases, but the COVID-19 situation has left things a little cloudy, particularly where the wording in the policy itself is concerned.

The FCA’s case is set to be taken to the Supreme Court to give a general idea as to how these claims should be made in the future and whether insurers should be paying out on existing policies. You can find the claim form, the particulars of claim and a representative example of policy wordings on the FCA website.

Preparing For The Potential of a Second Lockdown

While insurers may still be unclear about business interruption insurance, businesses can begin taking steps to ensure they are prepared in the case a second lockdown occurs. Until the results of the FCA’s case have been released, it is still unclear whether claims can be made and for that reason, it’s important to take out the time to read through your existing policy documents or be clear with any new policies you take out. We are on hand to help you find a suitable insurance policy and provide advice regarding business interruption insurance where possible.

In the meantime, businesses should be implementing changes to everyday work life in preparation for a potential second wave. Following the government’s guidelines to ensure the safety of your employees so you can stay open while able will help put you in a better position both financially and physically in the coming weeks. Working on your business internally, including reviewing employee contracts, fine-tuning the possibility of operating from home or in a lockdown scenario and introducing regular risk assessments to ensure everything remains safe can help put you in a much better position not only for a potential second wave but in the future in general.

If you’d like to find out more about the business insurance policies available for your business, so that you can get the best cover for peace of mind, feel free to contact our team today and we’d be happy to help.