Chancellor Rishi Sunak last night sought to provide some certainty for those businesses worried about their business interruption (“BI“) insurance.

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He announced that the Government had reached agreement with UK insurers to make sure that if a business had pandemic cover as part of its BI policy, and had been compelled to close because of the Government guidance issued on 16 March, then the policy should respond to a claim. That is despite the fact that the Government only recommended that people should not visit pubs, clubs and theatres because of Coronavirus, rather than mandating a shut down.

The Association of British Insurers (“ABI“), whose earlier comments we looked at in today’s previous post, welcomed the Government’s clarity but stood by its previous remarks that only a small number of businesses (typically larger ones with sophisticated insurance programs) would have purchased BI cover with a pandemic extension.

And of course the fact remains that even if a business has this type of insurance cover then a successful claim will still require compliance with all the other relevant terms and conditions of the policy. Needless to say, some businesses that do not have responsive BI cover may be examining what advice was provided by their brokers in this regard.  Watch this space for more developments.