For current information regarding insurances and COVID-19: we are regularly updating this landing page as the situation progresses, please check here for guidance.

Business Interruption insurance

The Association of British Insurers’ (ABI) view

From the very beginning, the ABI’s stance is that only very few insurance policies include Business Interruption (BI) cover for COVID-19. Their view is that:

  • It’s never been the intention of the insurance market to pay for the consequences of a pandemic
  • It’s unlikely that insurers have sufficient funds to cover such losses  
  • Protection ought to be provided by Governments or separately funded schemes*

*Similar arrangements have been put in place for Terrorism and Flood in the UK and other countries. Interested parties have already held preliminary discussions to work out how pandemic insurance might be provided in the future.

Legal action & effects on the financial security of insurers

The reality is that some policies contain exclusions or terms which mean COVID-19 is not covered but others are less clear. This has led to some well publicised legal challenges, particularly from the hospitality sector where businesses were forced to close – please see ‘Questions about Business Interruption (BI) cover’ below, for further information.

When placing your insurances, we take all reasonable steps to use insurers capable of meeting their future liabilities. The ABI has highlighted that insurers are unlikely to have sufficient funds to pay for the consequences of the pandemic, so the financial solvency (ability to pay future claims) of any that lose future court cases might be affected. This is something that the Financial Conduct Authority (FCA) will continue to closely monitor and we'll contact you if we believe you could be adversely affected.

Questions about Business Interruption (BI) cover:

I’ve seen in the press that some insurers are facing legal action?

The media have reported various responses made by insurers. On 15th April, the Financial Conduct Authority (FCA) wrote a letter to the CEO’s of London market insurers, specifically in relation to SME Business Interruption insurance. They acknowledged that the majority of policyholders don’t have any cover but, where cover exists, insurers shouldn't delay settlement and where appropriate make urgent interim payments.

The situation has since escalated and on 1st May, the FCA announced that it intends to obtain a court declaration to resolve contractual uncertainty around BI cover. The FCA’s aim is to speed up the process for customers making claims and to protect the integrity of the industry - click here for further information

The FCA has also contacted a small number of insurance companies to ask whether they are declining or intend to decline BI claims. This information will help determine which insurance companies will be asked to join the court process.

Information correct as of: 15/05/2020

What is Sutton Winson's response to this?

In the best interest of our clients, we’ve set up a specialist team to review all our commercial policies to find those which may have a small element of cover.

We’re very close to completing this project and once finished, we’ll be contacting those clients who we believe may have some cover, to discuss further.

Information correct as of: 15/05/2020

Can I claim for COVID-19 under the BI section of my policy?

A standard BI policy doesn’t cover you for the losses relating to the impact of COVID-19. It’s designed to respond to losses following damage to property by e.g. a fire or flood. COVID-19 does not constitute “damage”.

Some policies have extensions for:

  • Denial of Access (non-damage)
  • Notifiable Diseases
  • Actions of Public Authorities

Information correct as of: 15/05/2020

My policy includes a Denial of Access (non-damage) extension, can I claim?

The cover is normally for damage to neighbouring property and may exclude actions to suppress and/or control the spread of a disease.

Information correct as of: 15/05/2020

My policy includes a Notifiable Diseases extension, can I claim?

As COVID-19 is a new disease, it’s unlikely it will be specified under any policy.

Some policies aren’t specific and allow for 'Notifiable Diseases'. In cases where cover may apply, this will be again subject to the individual policy wording and circumstances.

Information correct as of: 15/05/2020

My policy includes a Public Authority extension, can I claim?

Possibly. It will depend on the exact wording and following our policy review, we'll be in touch if we feel there is some cover.

Information correct as of: 15/05/2020

Am I able to claim for loss of rent under my Commercial Property Owners policy?

If your policy has Denial of Access (non damage) and Notifiable Disease extensions it may respond due to:

  • An outbreak of a notifiable disease at the premises.
  • Denial/prevention of access by the UK Government, Police or Local Authority.

If there is cover, it will only be for contractual loss of rent. Rent not paid because a tenant decides to suspend payments wouldn’t be covered nor would your agreement to reduce or discount the rent.

Information correct as of: 15/05/2020

Can I get cover for COVID-19 mid-term or at renewal under a BI policy?

Currently, there’s no cover available in the insurance market. There may be a UK Government backed scheme at some point but it’s likely to be some time before a solution is found.

Information correct as of: 15/05/2020

Useful links

  • For the latest public information from the UK Government click here

  • For health advice and guidance from the NHS click here

  • For up-to-date travel advice from the Foreign & Commonwealth Office (FCO) click here

  • For the most recent information from the World Health Organisation (WHO) click here

  • For further information about UK Government support for businesses, click here

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