What does your insurance policy say about business interruption and can you claim?

This post concerns another question I am getting from clients relating to their policies of insurance

The  question most asked is whether business disruption insurance cover will kick in if your business:

1 . is closed by Government edict or government advice or

2. choses to close because a member of staff is diagnosed with or suspected of having the virus.

I am acting for a restaurant which has a member off staff off with suspected virus and I am thinking it should close to protect staff and customers but this is not really a question of licensing law but rather what individual company policies say on the issue. I am not an insurance lawyer but one of my insurance partners has suggested the following approach which you may find useful:

1.       Locate all the insurance policies the business has. There should be some or all of the following in place:

• General Liability
• Business Interruption policy (either a standalone or part of a General Liability Policy attached as an endorsement)
• Employers Liability (normally a certificate on the wall in a public area0
• Employment Practices Liability
• Directors and officers Liability
• Crisis management insurance*
• Mitigation insurance*
• Reputational insurance*

*These will either be standalone or part of General Liability or Business interruption Policy. There is a sub limit which allows the policyholder to spend up to a certain amount to manage their risk and incur the cost of doing so. 

2.       Before seeking advice from us you should contact the broker listed on the insurance policies and ask them for their views and take some guidance from them.

3.       Review the policy and look at the section entitled “Coverage” – it will tell you immediately what you are covered for – if you need guidance I have colleague who may assist

4.       If you have to act immediately we can write a letter to your insurers and the broker reserving your rights under the insurances- that way the insurers cannot argue that you acted independently and you have preserved your position in the short term. 

5.       While most policies have an “Act of God” exclusion, a number of insurers are recognizing the gravity of the situation and are working with their clients – they want to maintain the goodwill and, to be honest, if they keep declining coverage that will not necessarily be a good move for them.  I am sure you will remember this when it comes to a renewal of the policy!!

I  hope this assists further but please do revert back to me if you need more specific advice on your own premises and I can put you in touch with a fully qualified insurance lawyer or consultant