Phoenix Specialist Risk Solutions LTD

Covid-19 has impacted us all in different ways and you don’t need to be an insurance expert to have noticed the bad press which insurers have had in the recent weeks around cover for Covid-19 (Coronavirus) so we hope this article helps with what you need and what you should be aware of going forwards.

There are different aspects of cover included within most policies and we are focusing only on a few aspects, if you are in doubt about your cover or choices please contact your broker or us and we will try and help you.

At the time of writing this, already they have been a number of changes within the insurance market for care with some insurers not writing new business, covers being restricted or removed totally.

Business Interruption:

The cover is designed to keep you in the same financial position as if the event had never occurred, however the event is usually linked to a material loss, such as a fire, flood etc. Following the SARS outbreak in 2002-2004 many insurers changed their wordings from infectious diseases to a list of diseases and renamed specified disease, due to Covid-19 being a new disease it is not included on the list. This was done as they felt they could properly assess and price for the risk arising from new and emerging diseases

Some policies also have certain trigger points such as have been forcible closed by a competent local authority, whilst many establishments such as bars shops and restaurants have been forced to close care businesses have not and thus a claim has not been triggered.

Nearly all policies which are being renewed will now have a Covid-19 exclusion for business interruption claims, so if you did have the cover you are unlikely to have it going forward.

Employers Liability:

Employer’s Liability is a statutory cover and if you employee anyone you have a legal requirement to have Employers Liability Insurance. The statutory minimum level of cover is £5M however it has become general practice for cover to be issued at £10M. Most Employers Liability policies as mentioned are for a £10M limit of indemnity and will usually have an inner limit for terrorism cover for £5M. This could be a possible area where cover might change to include an inner limit for Covid-19 but the cover cannot be excluded.

Public Liability:

Unlike Employers Liability, Public Liability is not a statutory cover and as such changes can be made to the cover and it is possible to exclude Covid-19 from policies. In the general insurance market this is already happening with some insures adding a Covid-19 exclusion, which often also refers to SARS (Severe Acute Respiratory Syndrome). Some insurers have taken this a step further and are applying a Pandemic exclusion from their cover.

Others are taking a different approach and are specifically including cover for Covid-19 but applying an inner limit on the amount which can be paid out for costs and expenses, this approach has mixed feeling as whilst it is limiting the cover it is also specifically including the cover.

Legal Advice & Expenses:

Legal Advice and Expenses are usually included within your policy and this is sometimes overlooked but it is however an important part of the cover. They provide helplines and advice for clients on many topics including HR issues, it may be you need to furlough staff members who are not able to work during the pandemic, it could be they are on the Shielding list, the advice line will be able to provide you with the guidance on what to do.

Several providers also include Confidential Counselling lines which are available for you and your staff to talk in a confidential environment issues not only from Covid-19 but wider issues. At a time of great stress such helplines could prove their worth

Life after Covid-19:

We don’t have a crystal ball but we what is understood is that life will take on a new normal. The insurance market was already going through a number of changes with insurers looking reduce their exposure in loss making business. This has seen reduced capacity within Lloyds of London with the worst performing classes either dropped or subject to review and price increases. The action of Lloyds is mirrored in the general insurance market. It is inevitable that the care sector will suffer and price increases are to be expected; a number of insurers have already stopped writing new care business, at least for the time being.

Our advice

  • When policy renews carefully check what you are sent to review any new restrictions placed on your policy
  • If you find Covid19 is excluded from the liability cover, consider if this is acceptable to you as alternatives including the cover may still be available
  • Concentrate resources on ensuing the safety of your staff with adequate PPE etc.- this something your insurers will expect you to do
  • Above all staff safe!

If you have any questions around insurance cover for Covid-19 or any other matter, please feel free to contact us at or 01273 977221, we appreciate that we can’t cover all issues and may have raised questions.

When we finally get out of this strange place life will be different, and we will need time to reflect and mourn, during these times remember the amazing work you have done to care for vulnerable people when they needed it, we are all clapping to show our appreciation to you, well done and thank you.