- Some businesses are finding that they are not covered in the event of a shutdown – here’s what you need to know.
The coronavirus pandemic is having a massive impact on the economy – and car dealerships have not been immune as their customers have effectively been told to stay away.
However, some dealers have contacted their insurers to ask for help only to find that their Business Interruption Cover doesn’t actually apply in this situation.
We’ve spoken to the Association of British Insurers (ABI) and John France of broker Premier Insurance Centre to find out what you need to know.
What is Business Interruption Cover?
Let’s start with the basics. This insurance is designed to cover companies who suffer a loss of business in the event of some kind of disaster. The ABI says the standard commercial insurance policies that ‘the vast majority of businesses purchase’ covers risks such as damage caused by fire or floods.
However, France adds that “we provide policies for hundreds of garages and less than half include cover for business interruption, because garages historically did not feel they needed the cover”.
I did take out Business Interruption Cover, can I claim?
The short answer is maybe, maybe not. France says that these types of insurance will cover ‘a list of diseases insurers felt happy to provide cover for, but the list does not include coronavirus’.
The important aspect to look out for is ‘notifiable diseases’, of which coronavirus is included.
‘I understand insurers that include cover for a notifiable disease will require customers to notify the authorities when a “confirmed” case of coronavirus has impacted on their business. If the authorities act on this notification by closing the business the insurers concerned will then look at the claim,’ he added.
The ABI agreed that only a small number of businesses will have cover for ‘an infectious disease’, adding:
‘An even smaller number will have cover enabling them to potentially claim on their insurance for the presence or impact of the coronavirus pandemic. The Government’s clarification on Friday will help some of these policyholders claim if the other terms and conditions of the policy are met.’
I’m not covered for coronavirus, what do I do next?
Fortunately, the government has put together an unprecedented package of aid for businesses forced to shut down or scale back operations because of coronavirus.
A number of measures have been introduced to get businesses through this period, such as paying up to 80 per cent of an employee’s wages (up to £2,500), deferring VAT payments for three months, paying statutory sick pay for employees absent through coronavirus, a business rates holiday, government guarantees of 80 per cent on business interruption loans, and buying short-term debt from larger companies.
An in-depth explanation of the support on offer to businesses and eligibility details can be found on the Government website.