We are aware that you will have questions and concerns around how Coronavirus may impact your everyday activities, and what are the insurance implications.
There are no “one-size-fits-all” answers as insurers and policies vary widely, so the best thing to do is to speak to your usual adviser at La Playa, who can talk through your questions and the cover you have in place.
As a client of La Playa you have direct access to personalised advice from an expert who understands what your risks are and the way your policy works. However, please bear with us at this time – as you can imagine our advisers are rather busy at the moment and you may find email is the easiest way to reach us for now.
Business Interruption Insurance is simply not designed to cover an unprecedented global risk like Coviid-19 – if it were, it would be completely unaffordable. However, the government is putting in place measures to support businesses through the disruption.
Most Business Interruption cover is based on a specified list of diseases and has been since the SARS outbreak in 2003. These policies exclude business interruption due to new and emerging diseases, like COVID-19. Most policy wordings clearly identify the diseases that cover is offered for and, in addition, highlight that new and emerging diseases like COVID-19 are not covered.
The current COVID-19 outbreak is therefore not covered under a significant majority of business interruption policies.
Business interruption policies traditionally focus on physical events such as a fire at a premises. Although contingent business interruption extensions for a range of non-damage scenarios are available, such covers typically have much lower limits, shorter indemnity periods and are not guaranteed to respond to novel causes of loss such as COVD-19.
Employers and Public Liability
Liability cover provides protection for the policyholder against their legal liabilities to their employees or the public. This includes property damage and bodily Injury; bodily injury includes Illness (including resulting death). ‘Illness’ is not defined so could include legal liabilities incurred from COVID-19 in a situation where the Policyholder is alleged to have been negligent (for instance if they have ignored clear government advice regarding safety at work or travel).
- By sending an employee to an area affected where the FCO has advised against all but essential travel.
- Not providing essential equipment or guidelines for adequate sanitation.
- By making an employee come to work after they have travelled in an affected area resulting in others becoming exposed to the virus (either employees or the public).
To help avoid scenarios like these, you could consider establishing whether you have an up to date risk assessment and updated health and safety guidelines that include COVID-19, as well as an up to date business continuity plan. If in place, this should also be reviewed regularly as both the situation and government advice continue to evolve rapidly.
As we understand it, UK government has advised against ALL travel worldwide. We’re waiting for comments from insurers, but we believe this effectively negates your Travel insurance policy for all journeys yet to commence. If you booked the trip before the blanket travel advisory, we encourage you to make a claim for any unrecoverable cancellation costs. For those who are already abroad on trips, the policy will operate until they return home, but they should then not travel abroad again, since to do so would contravene current government advice and therefore breach your insurance conditions.
Management Liability cover is provided in the event a business Director commits a “Wrongful Act”. For this to be considered, you would have to show negligence in your actions that leads to a detriment suffered by either a third party or an employee.
Wrongful acts are split between those that cover the general duties and those for employment.
The core cover is for Directors & Officers (general and employment matters), with optional entity covers Corporate Legal Liability (general matters should the claim be brought against them and not the directors) and optional Employment Practices Liability (employment matters).
For general duties, the definition of “Wrongful Act” includes any breach of duty or negligent act, error or omission. COVID-19 related issues could be included under this cover.
For employment “Wrongful Acts”, insurance coverage for “failure to adopt adequate workplace or employment policies and procedures” could lead to COVID-19 related issues being included under this cover.
This would automatically be covered under the core D&O cover and you would also be covered by the optional Employment Practices Liability section if selected.
If you have a query then please contact us directly and we can address your specific concerns and individual circumstances.
Some insurers are now not offering new inspection policies, although they are offering renewals as normal. Some have suspended trading of all new business inspection policies in the short term.
Cancellation & Non Appearance Insurance
All contingency insurers have been applying a Coronavirus exclusion to new quotations and policy renewals since early February when the virus became a known circumstance.Communicable diseases are a standard exclusion under all contingency and non appearance policies. However this cover can be bought as a policy extension and if you purchased cover with this extension prior to early February 2020 then you may have an element of cover. It will be subject to the venue or event being closed by a government order and we would recommend that you check your policy wording closely in this respect and contact your adviser for further clarification.
Working from Home
If you or your team are planning to work from home during Covid-19 we need to make sure that if you are taking equipment away from your own premises, it’s covered if a loss occurs. Some office policies, for example, provide cover for Temporary Removal, so the policy will potentially automatically provide cover but we would ask that you notify us as each insurer’s policy/limits/cover will be different. You may also have specified cover for laptops and other portable contents. We recommend that you make sure that the current sum insured is adequate to cover all of the items that you have at risk.
Other considerations for your planning:
- Out of Office? Please note that your policy may be subject to an unoccupancy clause which means that if your office or premises are unoccupied we must notify insurers who will review their cover and terms. If your premises are vacated, how regularly will they be checked – and by whom? Make sure security measures and alarms are operating when not in use. Do you have an appointed key response?
- Safe kit: laptops and smaller items should be locked away if possible at the end of each day or at least put out of sight. For more bulky items in homes (eg: editing suites), try to ensure that they are out of view of the windows. When homes are empty, ensure that windows are shut and locked and if there are double locks on the doors that they are used, and any alarm is set. For items worth £5,000 or more being taken out of the office, it’s best to advise us so that they’re noted – and if necessary make extra checks on the employee’s security at home.
- Employees: your staff are covered whilst working from home but we recommend you check out the HSE website for some Health & Safety advice (PDF) on this.
- Backups: can employees still back up work whilst at home? Most will be connected to their usual work server but if not, what measures will be put in place?
- Extra cyber risk? Are employees accessing systems through secure networks? Is there any additional cyber risk to be considered?The best advice to our clients is to act as if you were not insured – taking all necessary steps to protect your organisation and its people. Then engage with us to review areas of recoverability under your policies.
Please contact your usual adviser at La Playa or call us on 01223 200650 if you have any concerns.
Here are links to other sources of general information on Coronavirus:-