“Coronavirus” is a term used to describe a certain group of viruses that cause a variety of diseases in humans and other animals. In fact, common colds are often caused by coronavirus strains.
COVID-19 or 2019-nCoV (novel coronavirus) is a new strain of the disease that was discovered in 2019 and is currently spreading across the world. At the time of writing there have been approximately 170,000 confirmed cases and 6,600 deaths around the globe (source: WHO). This is now officially a Pandemic and these numbers are only going to increase.
Employers may be left wondering what their obligations are in terms of paying staff who are not at work due to the outbreak. Perhaps obviously, usual sick leave and pay procedures should be followed if an employee contracts the virus. In the event of an employee having to self-isolate based on the advice of authorities, then the minimum requirement would be statutory sick pay. The Government announced in the 2020 budget that they will meet the cost of SSP if “due to coronavirus” for companies with fewer than 250 employees.
The economic impact of the disease is also severe, with expert predictions reaching hundreds of billions of pounds in losses to business.
If not already, companies in the UK will likely soon be dealing with challenges to an extent that few have faced previously; stringent hygiene measures, self-isolation, continuity plan implementation and supply and demand problems are all going to need addressing.
It is never been more important to have a business continuity plan in place. If your company does not, then we would advise addressing this as an absolute priority as it is likely to be required in the near future. Please note that if you are a client of Lothbury UK then we will be happy to assist in this regard, please get in touch. If you already have plans and procedures in place then we would advise reviewing the same and stress testing them (if they have not been implemented already). Government advice is that employees should work from home wherever possible.
We would also suggest requesting copies of continuity plans from suppliers and service providers to get an idea of the impact on your business of these companies engaging such plans.
Lothbury UK are now receiving regular enquiries from clients querying what cover they have in relation to COVID-19 impacting their business. Our generic advice is to do exactly that – contact us and we can provide specific guidance.
The question of whether a certain loss caused by a certain peril is covered under one of your policies will depend on the policy wording. We deal with over 100 insurance providers and have clients of varying size in various industries whom require a variety of insurance products. Therefore, the specific coverage (or lack of) in relation to such occurrences varies almost on a case by case basis.
One thing to note is that the Government’s decision on 05/03/2020 to make COVID-19 a ‘notifiable disease’ does not appear to be having the impact that was suggested in the press. Many of the reports stated that the virus being made a notifiable disease was the requisite for successful business interruption claims to be made. However, our experience from reviewing policy wordings and discussing with underwriters is that an exhaustive list of diseases for which the policy will respond are included in the wording, these are often identical to the notifiable diseases list. This does not mean that in the event of a disease being classed as a notifiable one, it is automatically included under such policies. Furthermore, we are now seeing some underwriters specifically excluding COVID-19 in the policies that they are writing going forwards.
In the event that your company suffers a business interruption loss and are unable to claim, the Government has announced in the 2020 budget an alternative: a “temporary coronavirus business interruption loan scheme” which will involve banks loaning up to £1.2m to support small and medium-sized businesses affected by the virus.
We would also advise keeping up to date with the latest advice from the following sources as a minimum and in turn, keeping your employees up to date with developments:
- Gov UK / Foreign & Commonwealth Office
- World Health Organisation
- National Health Service
As ever, we here at Lothbury are keen to hear from you if you have any concerns or queries.