The Corona Virus is continuing to have severe impacts on businesses across Ireland. All businesses are concerned about a range of issues that affect their ongoing liquidity, their capacity to operate normally and their fixed costs. To assist you we have listed out key messages regarding Insurance during this crisis.The Corona Virus is continuing to have severe impacts on businesses across Ireland. All businesses are concerned about a range of issues that affect their ongoing liquidity, their capacity to operate normally and their fixed costs. To assist you we have listed out key messages regarding Insurance during this crisis.
Unoccupancy
Co-Vid has led to a raft of SME companies temporarily closing their doors. It is very unfortunate and worrying for clients. If your business has been affected in this way, it is important you take certain precautions to limit the damage or unintended consequences that might arise.
- Security & Protection; If you are not trading normally, your business premises may be exposed to a greater degree. Burglaries have been reported so take every precaution possible to continue the security of your premises, such as daily checks, leaving no cash on property or disperse any theft attractive stock.
- Inform your Insurer: most policies have a 30 day unoccupancy clause, whereby you may leave property unoccupied up to 30 days but in many cases you must notify the insurer. Tell us immediately your property becomes unoccupied and we will discuss the next course of action with you. It is also possible that you might be closed longer than 30 days and this needs to be agreed with the insurer, they may wish to reduce cover in that circumstance.
Premium Financing
Certain customers may have issues where their insurance premium is financed through Finance houses, Close Premium & Premium Finance. These companies are aware of the stress on SME’s and pressure is being mounted on them to find workable solutions. They have announced they are working on temporary measure to assuage solvency issues. Please contact us if you are concerned about meeting payments on a finance agreement and we will assist you to minimise any financial impact and agree a way forward with the lender.
Business Interruption: Is my business covered? Answer: We are unsure at this time, but probably no.
Business Interruption Cover is designed to restore loss of income in the event of a property loss, or an insured peril happening to your premises or that of a key customer / supplier. Events that trigger this cover are Fire, Flood, Storm, Burglary, Escape of water etc. Therefore without the accompanying property damage happening, strictly speaking Business Interruption does not provide cover for situations like Co-Vid 19.
Certain policies may go farther than that, providing “All Risks” business interruption, which would cover all possible perils that are not specifically excluded, which could encompass Co-Vid however we are not aware of any policy like this in Ireland at present. Some policies specifically will cover Denial of Access due to communicable or notifiable diseases, however these policies usually list the diseases included and of course Co-Vid 19 is new, therefore also unlikely to be covered under that section. Your policy wording dictates what cover is provided under the contract, and some are non-specific in relation to viruses, therefore the meaning and cover could be challenged or interpreted in varying ways.
According to an article on 19th March 2020 in Risk Management Magazine; “BI provisions in COVID-19 cases raise more questions than answers. The actual peril or situation giving rise to any claimed loss must be carefully identified. For instance, losses may be caused by pre-emptive or preventative measures, or “community-based” measures such as “social distancing” rather than an outbreak or actual contamination of relevant property. They might also be caused by a supply interruption where actual contamination is a pending or hard-to-resolve question. Policy language will dictate the availability of arguments to the effect that lost use may fall within the scope of coverage in the absence of physical loss or damage, for instance where access to an insured facility is restricted or prohibited, an argument often rejected where typical policy wording is at issue”.
Therefore, it is unlikely to be cover for many Irish customers, and the response of our domestic insurers is not clear. It is an evolving situation and we recommend you discuss your situation with us.