The Government is in continual dialogue with the insurance sector to understand and influence its response to this unprecedented situation. The Government is also working closely with the Financial Conduct Authority (FCA) to ensure that the rules are being upheld during this crisis.
For those businesses which have an appropriate policy that covers government ordered closure and unspecified notifiable diseases, the Government’s social distancing instructions are sufficient to allow businesses to make a claim against their insurance, provided the other terms and conditions in their policy are met.
Furthermore, to resolve uncertainty for customers making business interruption claims, on 1 May the FCA outlined its intention to seek a court declaration, on an agreed and urgent basis, for a selected number of key issues. Subsequently on 1 June, the FCA announced the policy wordings that would be tested in the court action and insurers it had invited to participate directly, along with an initial list of policy wordings and insurers that will potentially be impacted by the Court’s decision on the representative sample. The FCA expects to publish a final list of all the relevant insurers and policies that may have impacted wordings shortly, and expects a court hearing to take place in late July.
However, most businesses have not purchased insurance that covers losses from COVID-19. Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers.
The Government recognises that businesses who do not have appropriate insurance cover will require support from elsewhere. As such, businesses should explore the full package of support set out by the Chancellor, which includes measures such as business rates holidays, the Coronavirus Business Interruption Loan Scheme, and wage support.