The UK Government has now classified Coronavirus, also known as COVID-19, as a ‘Notifiable Disease’. We have looked at how this may impact businesses and how insurers and related insurance policies are likely to respond.
Many companies in the UK are now beginning to worry about the possible financial impact of the Coronavirus on their business. Whether it be as a result of supply chain problems relating to products and materials usually imported from China, or fears that they may have to close their business premises if there is an outbreak of the virus, businesses are now facing challenges they have never faced before.
Whilst the UK Government has now classified Covid-19 as a Notifiable Disease and this is a very positive step, this will not automatically mean that insurance policies will provide cover where previously they didn’t. Business Interruption insurance is primarily dependent on there being physical damage (for example, by fire or flood) to either a policyholder’s property or, by extension, to that of key suppliers or customers. In each case, what is covered is the loss of revenue or the increased costs a business incurs as a consequence of the damage. Therefore, in the case of UK businesses which suffer as a result of supply chain problems with overseas suppliers, cover will only be triggered if the supply has been interrupted as a consequence of physical damage. The closure of a factory as a result of Coronavirus would not, therefore, qualify.
To read more on the Aston Lark website, click here
NB: Isca Barum were acquired by Aston Lark in January 2020.