Last week we blogged about the need for businesses to check their business interruption (“BI“) insurance policies as the Coronavirus crisis continued to bite.
Now the Government has come in for heavy criticism for telling people in the UK not to visit pubs, restaurants and theatres but then stopped short of ordering a shut down. Companies in the leisure sector complain that this has scuppered their ability to claim under any BI policy.
The Association of British Insurers (“ABI“) yesterday waded into the dispute by suggesting that most companies would not be covered by a BI policy even in the event of a Government mandated shut down. The ABI added: “Standard [BI] cover – the type the majority of businesses purchase- does not include forced closure by authorities as it is intended to respond to physical damage at the property which results in businesses being unable to continue to trade“.
However, the ABI confirmed that some larger businesses might have bought an extension to their BI policies to cover the financial losses flowing as a consequence of a closure due to infectious disease. If that was the case then a Government shutdown may assist in supporting an insurance claim.
Our advice remains that businesses facing a BI loss should still check with their professional advisers as to the nature and extent of coverage under a BI policy as a matter of urgency and review the possibility of making a claim.