Association of British Insurers (ABI)

The ABI has created an in-depth Covid-19 information hub that can be found here.   This is being updated regularly and contains advice, guidance and common questions on various insurance products but we have highlighted below some of the most common queries. 

ABI’s stance on the extent of Business Interruption (BI) cover

The spread of Coronavirus is unprecedented in modern times and we understand this is an incredibly difficult time for families and businesses. No insurance market provides widespread insurance coverage for pandemics and the UK is no exception. For such cover to be available at affordable prices for businesses would require a very significant subsidy from the government, given the scale of business disruption we have seen with the COVID-19 pandemic.

Instead, standard commercial insurance policies – the type the vast majority of businesses purchase – provide cover against a wide range of day to day risks including damage caused by fire, flood, theft and accidents involving employees. Insurers action claims of £22m each day to firms through these policies, supporting millions of businesses across the UK each year.

Only a very small number of businesses choose to buy any form of cover that includes business interruption due to a notifiable or infectious disease. Usually these extensions list very specific diseases that are covered, not any notifiable disease that may emerge such as COVID-19.

An even smaller number will have cover where the notifiable or infectious disease is unspecified enabling them to potentially claim for the impact of the Coronavirus pandemic. However, such policies often respond only when the disease is present at the premises as they cover the interruption to trade caused where business premises have been infected by an illness such as Legionnaires’ disease or norovirus and where the building needs to be closed and cleaned to deal with the specific incident.

Most notifiable disease extensions cover specific diseases that will be named in the cover. These are diseases that are well known and understood. If the policy does not allow for all human infectious diseases, then cover is unlikely to apply.

Some notifiable disease extensions are more general and do not specify certain diseases. In these cases, business interruption cover for Covid-19 may apply if Covid-19 is present at the premises and all policy conditions are met.