If your business has temporarily closed or been affected by the coronavirus disruption, chances are you are trying to save money wherever possible. You might think cancelling your insurance policy is an easy way to cut back - but the ramifications of not being insured could be devastating.
Staying insured for Business Interruption during the coronavirus disruption
It makes sense to question the necessity of purchasing Business Interruption insurance during lockdown, particularly when a business is temporarily interrupted and may be unable to trade.
Nevertheless, we strongly recommend policyholders should continue to insure themselves for the risk of Business Interruption. This is the case even if your premises is currently closed, or operating on a reduced basis.
Your Business Interruption cover does not simply operate for a day or a week. It extends to months and even years after an event which will help to support your company while your facilities are being rebuilt and your operations restored.
What does this mean in real terms?
You may choose not to take out Business Interruption cover, or cancel your current policy to save a bit of cash. If your business then suffers a significant loss (think a fire or a flood) during the current lockdown period, you won’t be able to claim for any loss of gross profit after restrictions are eased.
We understand there’s a lot of controversy surrounding Business Interruption insurance at the moment. But that’s all the more reason to make sure your business has adequate insurance cover for the ‘what ifs’ should the unexpected happen again. Work with an experienced, well-regarded broker that can help you identify the best policy for your needs. A broker will also help defend your business and negotiate a settlement with your insurer if you do need to make a claim.
These current challenging times should absolutely not dissuade you from purchasing comprehensive insurance cover. The current pandemic has demonstrated that there are countless things we simply can’t predict. Things that could affect your business. So you should do all you can to protect yourself against any potentially detrimental situation.
Still unsure of whether to cancel your Business Interruption policy?
You should continue with your existing Business Interruption coverage, and renew your policy when advised. It should be noted that any decision to cancel a company’s Business Interruption coverage is taken against our explicit advice. We implore all customers to think carefully about future implications before you take the decision to explore cancellation. Remember, our expert team is always on the other end of the phone to offer advice and to help discuss your options.
What about other policies?
You may think that no harm can come to your business if its doors are closed. Your employees aren’t at work. Visitors, customers or other members of the public can’t access the premises. So there can be no accidents or injuries leading to a claim… right?
The truth is you never know when you might need insurance to protect your business. Don’t underestimate the chance of an accident or injury occurring, even if your business is closed. Members of staff checking your site, or even members of the public walking on site (even if they shouldn’t be!) could suffer an accident that may prove to be your fault. To mitigate this risk, complete dormancy checks and regularly inspect your premises to ensure you cannot be deemed liable for any incident.
It’s also worth noting that individuals are legally entitled to make a claim within three years of an accident or injury occurring. If someone does decide to make a claim against you, you’ll need a dedicated team of insurance experts on your side to defend your claim and help protect your business.
You will also need to ensure your Buildings & Contents Insurance is up to date, and comprehensively covers you for any damage to your property or belongings. Flood, fire, theft and other material damage could all occur while your premises is temporarily closed, after all. As mentioned above, completing dormancy checks will help to minimise the risk of incidents occurring but you can never be 100% certain.
Experts predict that crime will rise as a result of the coronavirus lockdown, as business premises are unmonitored, cars are left unattended and petty criminals become restless. We cannot stress enough how important it is to have comprehensive cover in place to protect you.
Many insurers have extended their unoccupancy clause to cover businesses during lockdown, but business owners would be wise to thoroughly inspect their policy and contact their insurer or broker directly with any queries.