BI Situation far From Clear Warns Broker

Companies which are scouring their business interruption policies have been told that insurers have still yet to nail their colours to the mast on their approach to claims.

Speaking on a webinar to retail, hospitality, food and beverage company chiefs, Melissa Cunningham of the Claims Solutions Team at broker Marsh warned the vast majority of policies would not respond unless there was physical damage to the policyholder’s premises.

“It is vital that you read your policy wording carefully,” she said. “We are still in the situations where most insurers have yet to nail their colours to the mast in terms of how they will treat claims.”

While the lack of physical damage to a building is likely to see the majority of claims refused unless specific cover was purchased, there is still the issue over claims for loss of income through denial of access. Business leaders were told again coverage would likely only be activated due to either physical damage or denial by the police or civil authority due to a emergency issue in the surrounding area.

Even those who have taken out specific coverage for notifiable diseases may also have trouble making a claim.

With Covid-19 being a new virus it will not have been in the list of notifiable diseases that would have been in place at the time of the policy being taken out, although with Covid-19 now a notifiable disease there may well be some insurers and their wording that would be open to claims.

“The other issue we face is that SARS like Covid-19 is a Coronavirus and there may be some insurers that will look to use the exclusion of SARS in their policy as a way to exclude Covid-19,” explains Ms Cunningham. “However, this a far from certain as it is yet to be tested.”

She added that claims were now being submitted by firms to insurers on a precautionary basis, given that policyholders have an obligation to alert insurers in good time.

Firms have been told to ensure they have been able to quantify the level of loss they have faced as if a claim is made, insurers will require notification of the level of exposure they face.

The broker said it was currently working with clients to prepare claims and seek to find interim funding to ease cashflow problems.