COVID-19: “Now what?”

Five weeks ago, the threat of a COVID-19 pandemic was merely a distant hypothesis. Today, sadly, in the UK, coronavirus linked fatalities have risen to 108 and the outbreak is still rapidly progressing.

The government has upgraded its response and it is no longer ‘business as usual’, as looters raid a Sainsbury’s branch in south London at night amid a potential coronavirus lockdown, and pubs and tubes stations are set to close by the weekend. Employees are being sent home, and schools remain open for children of ‘key workers’ only.

COVID-19 is now a reality to all, and much-much-more than just basic hand hygiene and deep breathing exercises will be needed to get us all through these very unusual times.

Hopefully, businesses that have planned ahead to handle any contingency are better equipped to weather the storm. The employed and self-employed are affected too…at the outset of March 2020, insurers reported an increase of inbound enquiries, customers desperately wanted to know about the level of their indemnity in all sorts of circumstances.

At Oracle Solicitors we recognise that during these uncertain times, business and individuals from all sectors, will need to call upon specialist guidance upon the indemnity afforded to them by their existing insurance policies. For some, where policies were engaged via a broker any shortcoming of cover may require the trained eye of an insurance specialist. We offer experienced consideration and advice to redress negligence via their broker’s Professional Indemnity Insurance as an alternative.

Business Interruption Insurance

Some businesses may have insurance coverage for a proportion of the losses that may arise from COVID-19. Policy coverage which are likely to be available would ordinarily include business interruption, employee compensation and public liability.

Earlier this year, the Association of British Insurers (ABI) in response to the Government’s proposal to amend the status of COVID-19 to a ‘notifiable disease’ suggested that,

“Irrespective of whether or not the Government order closure of a business, the vast majority of firms won’t have purchased cover that will enable them to claim on their insurance to compensate for their business being closed by the Coronavirus… [either way] pay-outs will not happen without an “enforced closure” notice’ – it will be necessary to establish that there is a causal link between the losses and COVID-19.

The Department of Health and Social Care’s intention was to ensure any the public would be protected during the Covid-19 outbreak. Registering Covid-19 as a’ notifiable disease’ was thought to allow companies compensation through their insurance. But it seems most businesses are unlikely to have purchased cover providing for an infectious disease,

“Standard business interruption cover – the type the majority of businesses purchase – does not include forced closure by authorities as it is intended to respond to physical damage at the property which results in the business being unable to continue to trade… So only a very small minority of typically larger firms might have purchased an extension to their cover for closure due to any infectious disease…In this instance an enforced closure could help them make the claim, but this will depend on the precise nature of the cover they have purchased so they should check with their insurer or broker to see if they are covered.” – ABI 2020.

It is therefore advisable for businesses to engage specialist support, to ensure that where there is insurance in place, their claims are being processed fairly and without unnecessary delay.

Those affected by the COVID-19 enforced closure will need to consider quite early on [in the closure] whether their insurance policies provide for coverage. Insurers may impose specific claims notification requirements and obligations to keep the insurer updated, the duties to mitigate one’s losses too will not fall away.

At Oracle Solicitors we offer expert advice upon all insurance dispute matters, call us on 020 3051 5060 or email us on [email protected] to assist with your insurance claim.

Unemployment Insurance

In the event of a job loss, individuals with Unemployment Insurance policies ordinarily find cover in the form of a tax-free monthly amount. Those who were planning ahead for COVID-19 may find that these policies only commence pay-outs following unemployment for a pre-agreed waiting period (normally 3 consecutive months) often referred to as the ‘deferred period’. The length of this pre-agreed period directly impacts upon the policy premium.

Individuals attempting to obtain a policy at the very last minute are likely to find that they won’t be able to bring claims against their new policies, for some considerable time. Unemployment Insurance policies generally include an exclusion period, which is normally between 90 and 120 days. This protects the insurance provider from people taking out policies when they know they’re going to be made redundant.

That is not to say that these policies are not to be engaged for coverage, instead in-depth consideration of the relevant terms ought to be invested with the support of an insurance dispute expert, so as to ensure that where the terms of a policy are triggered, pay-outs are progressed and claims are fairly settled.

At Oracle Solicitors we offer expert advice upon all insurance dispute matters, call us on 020 3051 5060 or email us on [email protected] to assist with your insurance claim.

Income Protection Insurance

Some Income Protection Insurance policies may compensate policyholders for loss of earnings endured due to contracting COVID-19.

Similarly, to Unemployment Insurance, these policies normally contain a pre-agreed deferred period. So, where a claim results from the coronavirus, an existing policyholder is likely to remain without income for a period of up to 3 months prior to them receiving a monthly benefit. This benefit may only be for a proportion of their salary value lost and for an agreed period until they are well enough to return to work, or until their payment period concludes. How and whether the payments are triggered will be determined by the policy’s terms and conditions agreed.

Normally pandemics are not excluded, however in light of the unprecedented uncertainty faced by insurers, some insurers may seek to exclude claims arising out of pandemics.

Whilst a policyholder’s ability to get cover for coronavirus will depend on their circumstances and the insurer’s stance at the time of your application. The fairness of any additional exclusions being imposed amid the coronavirus pandemic will need redress, it is advisable that any individual finding amendments to their policy in anticipation of the epidemic should seek advice from an industry based insurance expert.

Cover for coronavirus under a new policy may still be possible, though most insurers are likely to impose more stringent underwriting restrictions on new applicants. Some may impose a ‘cut-off date’ after which no new policies will no longer cover coronavirus, and others may exclude cover for coronavirus related losses altogether.

But policyholders may find that they are unlikely to be covered by their Income Protection Insurance whilst “self-isolating” due to coronavirus. Especially where symptoms cannot be confirmed, and despite self-isolation being pursuant to government advice. Income Protection policies are unlikely to exclude periods of asymptomatic self-isolation with no positive test for coronavirus. Existing policyholders, testing positive for COVDI-19, during a period of self-isolation, should find cover under their policy.

At Oracle Solicitors we offer expert advice upon all insurance dispute matters, call us on 020 3051 5060 or email us on [email protected] to assist with your insurance claim.