Insurance Policies For May Not Cover Covid-19

Hospitality and licensed on shrewd operators may not be covered by insurance if the government introduced an official lockdown because COVID-19 may not be included in many business insurance policies.

The UK’s biggest pub group has warned its publicans that their existing insurance policies will not cover them for loss of business because of coronavirus.

The Ei Group which owns a portfolio of more than 4,000 pubs informed its publicans that Covid-19 is not included in the group’s policy with the insurer Zurich and has advised them to consider seeking further cover elsewhere.

In a letter sent to publicans last week Ei said: “It has been confirmed that Zurich is not including Covid-19 in its notifiable diseases section. As such, any business affected by Covid-19 will not be able to claim for loss of trade.”

Earlier this month the government bowed to pressure and changed its stance on insurance to cover firms for coronavirus losses in England, saying that it would declare coronavirus as a “notifiable disease”, a formal classification required by many insurance policies, a official classification required by many insurance policies, however it is understood that many businesses are being informed that they will not be covered since existing policies name specific diseases that are covered and since Covid-19 is a new disease it will not be on the list of specific diseases.

A spokesperson for the Association of British Insurers said: “A small number of businesses may have cover in place that will specifically provide for business interruption arising from notifiable diseases. However, this type of extension is not commonly included as standard. Standard business insurance policies are designed and priced to cover standard risks and are therefore unlikely to provide cover for the effects of global pandemics like Covid-19.”

The government is coming under mounting pressure to financially support the sector and sector trade bodies have proposed measures to support businesses in the short term including suspending business rates HMRC tax payments, PAYE and VAT as well as corporation tax, and the postponement of the introduction of the national minimum wage and the living wage.