Many businesses have recently been forced to close due to the impact of COVID-19 and the measures which the Government has had to take in the interests of us all. There has been an uproar in the media with many commentators berating insurance companies for rejecting claims for businesses that have been forced to close. Many commentators do not understand the first thing about insurance policies and are not best placed to inform the general public. While it’s populist to bash insurers for not covering business losses, one cannot expect an insurer to make payments to businesses if the cover doesn’t exist in the first place.
Many Insurers Not Accepting Liability
It is clear that many insurers are not accepting liability for business closures due to the virus and that most businesses will not be covered for the interruption. However, there are a number of policies that have cover for your business losses. Having an expert understanding of your policy wording will help you figure out if your policy extends to cover you for business losses.
There are two types of policy extensions to your business interruption that can potentially cover you for this situation:
Infectious Disease Extension
- Many policies expressly state which diseases fall within the realm of being an infectious or notifiable disease. If this is the case, your policy WILL NOT provide cover, as COVID-19 is a new disease and will not have been included.
- Other policies have wording specifically excluding a range of notifiable diseases, such as AIDS, SARS Etc. In these instances, outbreaks related to these diseases, whether notifiable or not, are fully excluded from cover.
- Other policies define the disease with reference to the actions of the Government, i.e. is it a notifiable disease. There should be less difficulty in this case, as COVID-19 has been a notifiable disease in Ireland for a number of weeks already.
- Many policies require the disease to be on your premises; other refer to a specific radius.
- Many insurance policies do cover business closure or restriction due to the outbreak of an infectious disease.
Denial of Access Extension (non-damage)
- This may cover you if you are prevented from accessing your property by an event, or by the actions of a competent authority, thus causing your business interruption cover to engage. This is a grey area as some businesses that have been advised to close, can still continue to operate if they do so safely.
- It is worth noting that there may be subtle differences in the wording. You may be covered, but it will depend on your individual circumstances and the policy wording.
Understandably business owners are extremely worried at the moment. If you are unsure as to whether or not you are able to claim business interruption insurance, please contact Trevor Kelly on 0863571713 for an Expert Independent Review.