Apr 17, 2020

Covid-19: The Insurance Position

Most businesses in the United Kingdom, and indeed throughout the world, will have been impacted directly or indirectly by the consequences of the global coronavirus outbreak. The following points are not exhaustive, but may help provide some clarity as to the most commonly ‘Frequently Asked Questions’ regarding the extent to which insurance policies in the UK may respond to meet any financial losses that may arise:

 

PROPERTY DAMAGE & BUSINESS INTERRUPTION

Despite much misleading media reporting the reality is that, for the vast majority of businesses, there is no meaningful cover available for Property Damage and/or Business Interruption losses related to the impact of COVID-19 (Coronavirus). The Association of British Insurers (ABI) has explained the reasons for and context of the general insurance position in some detail click here, including with regard to unoccupied business premises.

 

LIABILITIES 

As far as Employers’ and Public Liability policies are concerned, insurers will respond to claims brought against a business alleging negligence for personal injury. Appropriate 'due diligence' should therefore be exercised, as always, in the context of both employee and customer/public welfare. The Health & Safety Executive has recently advised companies to file a RIDDOR Report in the event that a worker has been diagnosed as having COVID 19 and there is reasonable evidence that it was caused by exposure at work. More detail on this can be found on the HSE website.

Directors and Officers’ Liability policies may also be triggered if a Director faces a claim alleging their contingency planning was unsatisfactory or that inappropriate management decisions were made. For this to be considered, they would have to show negligence in their actions that led to a detriment suffered by either a third party or an employee. If an Employment Practices Liability policy extension has been purchased, the insurance coverage for failure to adopt adequate workplace or employment policies and procedures could also lead to COVID-19 related issues being included. 

 

BUSINESS TRAVEL

Should COVID-19 be contracted while on a trip, consequent medical expense and trip interruption/curtailment costs would be insured. As always, however, travel against Foreign Office advice should be avoided.

If COVID-19 is diagnosed prior to departure or if the fulfilment of an insured trip is rendered impossible, current policies would generally provide cover for trip cancellation, but 'fear of travelling' in itself would not be covered. 

 

All covers, of course, are subject to the terms and conditions of the relevant insurance policy wordings. Should these be amended by insurers as cover is renewed we will, as always, bring any such alterations to your attention.

If any clients have questions or concerns that are not addressed here, please do get in touch with your usual adviser who will be happy to help – we are fully operational.

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Blackford is a trading name of Blackford Group Limited, authorised and regulated by the Financial Conduct Authority (Firm Reference 831508). Registered Office: Blackford Group Limited, 26 Charlotte Square, Edinburgh EH2 4ET (Registered SC616744). Blackford Group Limited is an Appointed Representative of James Hallam Limited, authorised and regulated by the Financial Conduct Authority (Firm Reference 134435).

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