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Loss of revenue triggered by the spread of new viruses are generally excluded because they cannot be properly quantified at point of sale. This is because such an event would cause solvency issues for insurers.
This point was made a few days ago by the guy who set up London Union, when the hospitality industry was claiming that the government's failure to mandate closure meant they couldn't claim. And he was right, most policies would cover the loss of revenue from closure, just not for Covid-19.
I did the figures yesterday and can keep paying 20 staff for up to 3 months, or 5 if I run the cash right down, but that would give me no breathing space to build things back up if/when we reopen. I may have the agreement of my landlord (the council) to skip the rent for a quarter, which would stretch things a bit further, but I'm really worried for people who will struggle to find work even in the long run. As a social enterprise, we employ and train people who are not going to be successful in a competitive job market.
Markyboy-
> This point was made a few days ago by the guy who set up London Union, when the hospitality industry was claiming that the government's failure to mandate closure meant they couldn't claim. And he was right, most policies would cover the loss of revenue from closure, just not for Covid-19.
He was wrong. A standard business interruption policy wording contains two extensions worth examining;
Action by Police, Government or Other Competent Authority
The prevention or restriction of access to, or the closure of, The Premises by any Police, Government or other
competent authority due to an emergency event within the distance stated in The Schedule of the boundary of
The Premises that causes or threatens a danger or disturbance.
The provisions of any Automatic Reinstatement Clause does not apply to this Clause.
We will not provide cover for
(1) any action taken in controlling, preventing or suppressing the spread of any disease.
(2) any danger or disturbance caused wholly or partly by You, or through Your misconduct, connivance, neglect
or omission.
(3) any interruption or interference lasting less than the consecutive hours stated in The Schedule.See exclusion (1) where ANY disease is clearly excluded, not just Covid19.
Specified Diseases, Food Poisoning, Vermin Pests and Defective Sanitation, Murder or Suicide
We will provide cover in respect of interruption or interference with The Business during the Period of Insurance
following
(1) a Specified Disease occurring at The Premises or within the distance in miles from the boundary of The
Premises stated in The Schedule
(2) any person contracting an illness caused by food or drink poisoning, which is directly attributable to food or
drink supplied from The Premises
(3) the discovery of an organism at The Premises which is likely to result in any person contracting an illness
caused by food or drink poisoning or a Specified Disease
(4) the discovery of vermin or pests, or any accident causing defects in the drains or other sanitary
arrangements, at The Premises
(5) any occurrence of murder or suicide at The Premises which restricts the use of or results in closure of The
Premises on the order or advice of the competent authority, and directly results in a reduction in the
Turnover of The Business or where insured by this Section, a reduction in Revenue, Fees, or Rentals.
The provisions of any Automatic Reinstatement Clause do not apply in respect of this Additional Cover
We will not provide cover
(1) at The Premises, if in relation to any claim arising directly or indirectly from an occurrence of Legionellosis or
Legionnaires Disease You have failed to ensure compliance at all times with the Health and Safety
Commissions Approved Code of Practice, “The Prevention and Control of Legionellosis (including
Legionnaires Disease)“ Ref ISBN-0-7176-1772- 6 or any supplementary, replacement or amending Code of
Practice.
(2) for any costs incurred in cleaning, repair, replacement, recall or checking of property
(3) for reduction in the turnover of any premises, or where insured by this Section, a reduction in Revenue,
Fees, or Rentals caused by
(a) any occurrence of a Specified Disease not at The Premises or not within the distance in miles from the
boundary of The Premises stated in The Schedule
(b) food poisoning, vermin, pest, defective sanitation, murder or suicide, not occurring at The Premises.
For the purposes of this Additional Cover, the following definitions apply
Indemnity Period
The period during which the results of The Business are affected due to the accident, occurrence or discovery
starting from the date The Premises are closed or their use restricted and ending not later than the Maximum
Indemnity Period.
Maximum Indemnity Period
As stated in The Schedule.
Specified Disease
(1) Any of the following diseases contracted by any person Acute encephalitis, Acute poliomyelitis, Anthrax,
Chicken pox, Cholera, Diptheria, Dysentery, Erysipeloid, Legionellosis, Legionnaires Disease, Leprosy,
Leptospirosis, Lyme Disease, Malaria, Measles, Meningitis, Meningococcal septicaemia, Mumps,
Ophthalmia neonatorum, Paratyphoid fever, Puerperal fever, Plague, Rabies, Relapsing fevers, Rubella,
Scarlet fever, Smallpox, Tetanus, Toxoplasmosis, Tuberculosis, Typhoid fever, Typhus fever, Viral
hepatitis, Whooping cough or Yellow fever
(2) Viral haemorrhagic fever caused by the following Lassa virus, Junin virus, Machupo virus, Sabia virus,
Guanarito virus, Ebola virus, Marburg virus, Crimean-Congo haemorrhagic fever virus, Hanta virus, Rift
Valley fever virus, Yellow fever virus or Dengue virus.Again looks promising but Covid19 is not one of the diseases specified.
marcomarcos
The insurance policy is fine, it just wasn’t designed to cover a Covid19 type scenario. The Government know this but continue to push out misinformation.
Loss of revenue triggered by the spread of new viruses are generally excluded because they cannot be properly quantified at point of sale. This is because such an event would cause solvency issues for insurers.
I can’t answer your conundrum I’m afraid other than to say it’s unlikely the vast majority of business interruption insurance policies will respond.