All you need to know COVID-19 & Business Interruption Insurance Policy
When a company is unable to function due to unexpected incidents, business interruption insurance prevents them from financial loss. The COVID-19 outbreak this year has prompted concerns about whether the coverage extends to pandemic-related losses. The short answer is that it depends on the policy’s terms and how they are viewed by the insurer.
As they continue to negotiate these choppy waters, many companies will be wondering where they stand with their business insurance plans, so we hope this article proves beneficial to many of you.
What is Business Interruption Insurance?
Many companies may not purchase Business Interruption Insurance because they feel that other insurances, such as buildings and contents plans, can cover their risks sufficiently. However, while these business insurance protection plans can help with damage caused by a fire or a flood, they do not compensate damages sustained as a result of such incidents.
Small and medium-sized enterprises are the most popular customers of business insurance policies. Businesses with 100 or less employees and $5 million in sales, according to the Insurance Information Institute, are strong candidates for coverage.
A typical business protection policy will include property, liability, and business income coverage. So you’re covered against losses stemming from damage to your business property or its contents caused by a covered peril, as well as personal liability claims or loss of income if the business has to close temporarily.
Business Insurance Advisor can help you to the choose right business protection plan and can prepare you for the unexpected, such as disruptive data loss, expensive compensation claims or specialist equipment damage.
Also Read: Keyman Insurance- A Key To Your Business Security
Will my cause of loss be covered?
It would be important for those complaining under a Business Protection policy to be able to demonstrate what caused their loss. This can seem to be simpler than it is.
It’ll be important to double-check the policy’s wording to make sure it addresses “losses incurred by government (or other public authority) restrictions as a result of the incidence of a notifiable human disease.” The wording of most policies would be identical or to that extent.
Even if the strategy contains the language, there are still risks to be aware of when it comes to cause. Businesses who choose to close as a result of government guidance would almost certainly be claimed that they were not legally obliged to do so. Insurers can refuse to pay out if your company isn’t in the retail industry. Additionally, companies can double-check the time span within which their insurance claim is valid. COVID-19 became a notifiable disease on March 5, 2020, so any argument involving losses prior to that date is likely to be denied.
Businesses who have suffered losses as a result of polluted premises should be careful of citing pollution as the cause of their losses. Insurers are likely to claim that some of the losses would have arisen regardless because of the disease’s overall effects.
Also Read: Ultimate Guide to Income Protection Insurance
Can You Buy a Cover For Pandemics?
Obtaining insurance to cover the expenses incurred by a company as a result of the Coronavirus outbreak is currently unlikely. Insurance firms have been tightening the terms of their plans to make it clear that infectious disease coverage is not included.
For example, Wimbledon’s promoters took out specific Pandemic Insurance after the SARS outbreak in 2003, making it one of the few sporting events to be prepared for a Coronavirus outbreak. However, this came at a hefty annual cost of £1.5 million. Following the cancellation of the event in 2020, and after 17 years of coverage, the organisers are expected to collect a £114 million insurance pay out.
What other circumstances could affect my policy?
A provision in most Business Interruption plans allows insurers to minimise the amount paid out if there is a market trend that would have impacted the business regardless of the occurrence of the insured case, such as COVID-19.
While most companies would blame COVID-19 for any decline in their industry, there are arguments that other factors might also be to blame.
Mountview FS have expert business policy advisers, they will be able to provide you with the best guidance and level of coverage to suit your needs. If you would like to hear more about Business Insurance Policy or how Mountview Financial Solution will help you protect your company. You can reach us by phone @ 02080950120 or send us your requirements at info@mountviewfs.co.uk!
