COVID-19: Insurance updates from Boswell Aftermarket

IAAF Service Partner, Boswell Aftermarket, have provided the following information and advice to businesses and individuals on matters of insurance.

BUSINESS INTERRUPTION INSURANCE
Businesses often insure against the risk of material damage to property, including risk of business interruptions arising from such property damage resulting in partial or total closure of the business, which in turn leads to loss of profits. Insurance against such losses is often called “business interruption” insurance (BI).

Traditional BI coverage is limited to where the commercial property suffers typical exposures, such as a fire, a flood, or other natural disasters. Where a business suffers interruption due to a pandemic, and has to suspend operations, “physical damage” does not fall within the definition in the property policy. Business interruption policies may however extend cover to business interruption even when there is no physical damage, for example, denial of access or more specifically in this situation, infectious diseases extension. This type of cover is rarely included.

Although there are standard wordings, whether businesses can recover for losses arising from COVID-19 depends on the specific wording of their insurance policies, as such extensions are often subject to negotiation and dependent on the nature of the business risk.

BUSINESS INSURANCE – GUIDANCE FROM THE ASSOCIATION OF BRITISH INSURERS
“The spread of Coronavirus is unprecedented in modern times and we understand this is an incredibly difficult time for families and businesses.

“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 pay out £22m each day to firms through these policies, supporting millions of businesses across the UK each year.

“Only a very small minority of businesses choose to buy any form of cover that includes local closure due to an infectious disease.

“An even smaller number will have cover enabling them to potentially claim on their insurance for the presence or impact of the Coronavirus pandemic. The Government’s clarification yesterday will help some of these policyholders claim if the other terms and conditions of the policy are met.

“We strongly recommend that every business should check with their insurer or broker if they wish to confirm the type of cover that they have purchased.”

HOW COVID-19 CAN IMPACT CERTAIN INSURANCE POLICIES
Inevitably, COVID-19 will have an effect on elements of your personal insurance cover. We answer some of the questions you may have with regards to working from home and travel.

HOME INSURANCE
Will my home insurance policy be affected if I have not told my insurer that I’m working from home?

• Working from home, due to the need to self-isolate should be covered by standard home insurance policies, assuming that the work is clerical in nature.
• If individuals are working from home and receiving visitors to their home on business matters, they should check with their insurer. In some cases, there may be some restrictions in cover, such as loss of money and theft being
excluded unless there is evidence of forcible and violent entry to the property.
• The business equipment used (e.g. laptop) is likely not to be covered, however in most cases the employer would be liable for ensuring their equipment is insured away from the office.

Will home insurance cover the cost of a deep clean to my property should it become contaminated by COVID-19?
• Most standard home insurance policies do not provide cover for the costs of cleaning a property.

My property has suffered damage (from a fire, flood or other named peril) and it’s uninhabitable. I am selfisolating, so will my broker help me find alternative accommodation?
• Insurers’ priority is the safety of their customers and the wider community.
• Insurers will continue to provide cover for customers as promised in the policy – including funding the cost of alternative accommodation – whilst acting in accordance with the UK Government’s advice at that time.
• It is vitally important that you contact your insurer to discuss your claim further, as each one will be managed on a case-by-case basis to ensure that customer interests are best protected.

I have been quarantined or am unable to travel from abroad and therefore my home may be left unoccupied for over the 30 or 60 day limit on my policy. Will I be covered?
• Insurers will be taking a pragmatic approach to individuals who are quarantined or stuck abroad and are unable to return to their property within the timescales set out in their policy. However, individuals should contact their broker to obtain advice on this issue.

TRAVEL INSURANCE
Travel insurers are committed to supporting their customers through this unprecendented global event and have made six pledges to customers. These are outline by the Association of British Insurers below, but here are answers to common questions travel policy holders may have.

Why are insurers stopping selling some policies?
• Insurers are carefully monitoring the fast-moving developments in the coronavirus outbreak, and some have stopped selling travel insurance to new customers while others have stopped covering cancellations or disruption related to the Coronavirus. Insurance is based on assessing the possibility of an event occurring. Insurers take account of when any risk becomes more of a probability than a possibility and then make commercial decisions. It should be noted that the World Health Organsiation has declared Coronavirus a global pandemic.
• But be reassured, trips already booked abroad under existing policies remain unaffected. Travel insurance for non-Covid19 related risks also remains available.

What should I do about travelling?
• The Foreign and Commonwealth Office has advised against all but essential travel for 30 days from 17 March 2020. This unprecedented step actually provides welcome clarity for customers and the industry. Generally, insurance cancellation or travel disruption will relate to FCO advice. This decision will therefore allow policyholders with cancellation or travel disruption cover in place to claim for cancelled trips that were already booked and cannot now go ahead.
• Looking ahead, if this advice is lifted after 30 days but still applies to the destination you were planning to visit, then you can claim under your travel insurance policy (again, provided you have cancellation or travel disruption cover in place).
• If you make alternative travel plans, then you may be able to transfer your travel insurance to cover your new destination.
• Travel insurance policies may cover some out-of-pocket losses, and also help you to leave the area and return back to the UK if you are advised to do so, and if you are unable to get assistance from any other source.

If I ignore any government advice against all but essential travel, will my travel insurance still cover me?
• If you travel against government advice then you are likely to invalidate your travel insurance. If you are unsure check with your travel insurer.

THE 6 PLEDGES FROM ABI TRAVEL INSURANCE MEMBERS:

  1. Ensure that customers are provided with, or directed to, the most up-to-date information around the Coronavirus outbreak and publish clear information at the point-of-sale around the valid coverage of their policies.
  2. Work closely with customers to signpost them to where compensation may be received for cancelled transport, holidays or an inability to travel abroad e.g. airlines, travel providers and travel agents.
  3. Consider all valid travel insurance claims quickly and fairly for costs not recoverable from elsewhere arising from cancellation, travel curtailment or disruption so that customers receive a fair outcome.
  4. Upon notification from their customers, help them consider their options for transferring their travel insurance to cover a new destination should people wish to make alternative travel plans.
  5. Implement business continuity plans to be able to continue to handle travel insurance claims in challenging circumstances.
  6. Be understanding of the difficulties customers may have in getting medical certification and consider, where appropriate, alternative evidence that customers may be able to provide.

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