Business Interruption, where do I start?

Now more than ever, business owners are frantically turning to their brokers and reviewing insurance policies to try and understand whether they are covered for business interruption losses due to Covid-19.

The big questions are: 

1. Where do I look to see if I have business interruption insurance cover?

You may have cover under any one of these types of insurance policies:

• Public Liability Insurance
• Employers’ Liability Insurance
• Property Insurance
• Shop Insurance

The starting point is to look at the Schedule of the Policy where you may see it described as ‘Business Interruption Insurance’ or ‘Revenue Protection’.

1. What events does my policy cover?

The Policy wording will go into details about what type of events trigger the cover for interruption to business.

It is arguable that cover that provides for an ‘event of closure by a public authority’ includes closure under the Coronavirus regulations.

But watch out for some policies that are triggered based on the manifestation of a disease ‘at the premises’ and not at the closure of a public authority.

Other policies will set out ‘specific exclusions’ relating to an outbreak of disease.

1. Am I covered under my policy?

Only a detailed examination of the Policy and Schedule will determine the terms of cover. That’s where we can help.

1. How much am I covered for?

The Schedule of the Policy usually sets out the limits and period on how much you can claim. Most policies will be assessed on likely ‘gross profits’ in the coming year and usually for a period of 12 months.

1. How can I make a claim?

The starting point is always to read the Policy carefully as it will set out the procedure to make a claim and what businesses should do to try and reduce losses, when to notify the insurer and what information to provide to the insurer. By not following the set procedure could leave you in a vulnerable position.

1. I’ve been refused cover by my policy provider, what do I do?

There are a number of legal avenues including:

• Arbitration
• Court Proceedings
• Claims to the Financial Ombudsman Service

1. I told my Broker that I needed business interruption insurance cover but now I’m told that I don’t have that cover, what can I do?

If you have been left under-insured for business interruption as a result of your broker’s negligent advice, a claim can be brought against the broker for professional negligence. Most insurance brokers have professional indemnity insurance to cover them for such claims.

It is important for business owners to seek expert advice and guidance to establish whether a claim can be made on the business interruption policy. That’s where we can help.