Coronavirus (COVID-19) is causing increasing disruption to businesses with a consequential loss of productivity and revenues. Such business losses are possible from both the direct and indirect effect of the spread of the virus. An example of a direct loss is a loss suffered by a business where one or more employees in a building reports they may have the virus. In these circumstances employers are quite properly taking immediate action to reduce the risk to other employers, which can involve whole buildings being temporarily vacated. This also allows for the building to be professionally cleaned. There are also the indirect losses which are possible, for example, a reduction in revenues due to the wider measures individuals and businesses are taking to avoid exposure and to limit risk of infection where possible. This includes the effects of isolation protocols in place and ordered.
It is unlikely that losses directly or indirectly caused by COVID-19 are covered under a standard business interruption cover, although it is always sensible to check specific wordings. Policies can cover some forms of disease outbreak, but for cover to operate the virus or infection must be from a notifiable disease. There are other requirements of cover to operate but in the absence of a notifiable disease, a policyholder does not get over the first hurdle. Covid-19 has now been classified as notifiable and so this will assist policyholders, subject to the timing of the loss and other policy requirements.
In response it is essential for businesses to introduce or update their business continuity plans in light of the current situation. If the UK follows the action taken in, for example Italy, where there is a lock-down in place, that is an outcome which must be planned for.
It is essential to review each potential claim on a case by case basis. Should you wish to discuss the above, or should you have any concerns regarding Covid-19 and how a policy might respond in respect of Covid-19, BLM has an experienced team of experts willing to assist you in navigating your issues.