In response to the unprecedented impact of the Coronavirus Covid-19 on our business customers we have produced a Covid-19 Business Insurance briefing and toolkit for free issue amongst the business community.
If you would like us to add to this library of Covid-19 Insurance advice please let us know and we will endeavour to add further content as requested.
Please download the Covid-19 Insurance report and accompanying documents using the buttons below:
FCA COVID BUSINESS INTERRUPTION TEST CASE JUDGEMENT
The FCA has announced that the Judgement in the High Court test case on the application of Insurance Policy Wordings in respect of Business Interruption claims due to COVID19 disruption will be read on Tuesday 15th September 2020.
Judgement will seek to clarify the position on ‘non-damage’ business interruption claims that have so far been declined by Insurers as falling outside the scope of cover in their policy wordings.
IF JUDGEMENT FALLS IN FAVOUR OF THE FCA POSITION:
Our customers who have suffered a loss of income resulting from COVID19 disruption should take steps to make a formal claim to their insurers. Butler Evans will assist you to do this. To demonstrate your loss we would recommend you gather together certain documents including:
- Sales/Turnover ledgers for the period from March 2020 to September 2020
- Sales/Turnover ledgers for the period from March 2019 to September 2019
- Stocktaking records for period March 2020 to September 2020
- Stocktaking records for period March 2019 to September 2019
- Costs & Expenses (including Wages) for period March 2020 to September 2020
- Costs & Expenses (including Wages) for period March 2019 to September 2019
Depending on the type of business trade you operate Insurers may require further information in addition, we will help you to understand what is required when this is known.
LEVEL OF COVER PROVIDED
Part of the FCA Test Case hearings will have looked at the level of insurance coverage provided under policies, however the general understanding is that any insurance cover would be limited to cover provided under non-damage extensions. These are often lower limits than the full Gross profit Insurance, we can help you to understand the limit of insurance potentially available.
WILL THE FCA TEST CASE BRING CERTAINTY TO INSURANCE CLAIMS?
Both sides to the Test Case are free to appeal the Judgement and whatever the outcome it is certain some form of appeal will be made by on of the sides. This will cause a delay of the final outcome of the test case and final certainty to any dispute between Insurers and their customers.
If you want immediate help please email us at COVID19@butlerevans.co.uk
Useful COVID19 related documents & templates:
Employee wellbeing and stress management
One of the developing risks emerging from the COVID Pandemic is that of mental health. I am sure all Directors & Principals appreciate that they and their staff are under an extreme amount of pressure from events and circumstances beyond their control, which are likely to cause additional stress and worry.
Many Insurers who provide Employer’s Liability Insurance are offering Stress Counselling services through helplines detailed within your policy. If you do not have access to this resource, the NHS also provides a range of free to use services via their mental health services:
What should employers be doing about their staff mental health?
Workplace activities that lead to hazards to health need to be risk assessed and suitable control measures put into place. Stress and Mental Health hazards are obvious for staff working in high pressure roles or roles with potential conflict points such as Police and Ambulance personnel. However, in the new work environment it can be difficult to spot the hazards as there is no past experience to guide us. Where employers wish to offer support to staff then drawing up a Stress & Mental Health Risk Assessment is a good place to start.
This could be as simple as acknowledging a Stress Hazard as being ‘Changes to the working environment’ and a Risk Control Measure as ‘communicating with staff to provide advice on how to get assistance for Stress and Mental Health issues’
If any customers are interested in developing their understanding of this key issue then the University of Derby is offering a 6 hour Workplace Wellness course free of charge during the COVID Pandemic:
The UK Gov is assisting businesses to retain staff during this Covid-19 crisis by paying 80% of salaries for furloughed employees. Furloughing means laying-off on paid leave with the anticipation of returning employees to work in the future.
Read the UK Government guidance on how to furlough your employees and claim the 80% of salary grants here: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
UK Government Business Support
The UK Government has issued a variety of measures to support business during the COVID-19 crisis. Read about all these measures on Gov.uk here: https://www.businesssupport.gov.uk/coronavirus-business-support/
Many businesses are closing premises which will become largely unoccupied.
Insurers do not cover unoccupied premises without restrictions as in general these attract more theft and arson activity. However, in the current crisis Insurers are reviewing their position and many are providing extended cover or flexibility of policy terms.
What does unoccupied mean?
Insurers define unoccupied as when a premises is no longer being used for any activity.
If your premises does become unoccupied it is important that you notify your insurers immediately. If you are a Butler Evans customer please notify your account executive who will notify Insurers on your behalf. Many Insurers will have a clause providing cover for up to 30 days on unoccupied buildings, but in respect of other assets cover may vary.
BUT as an insured you also have an ongoing obligation under the Insurance Act 2015 to immediately notify Insurers of significant changes to the risk, Insurers may well consider the cessation of any business activity at a premises to be a notifiable change.
You should also take mitigating steps to protect your premises during any period of closure and ensure that insurance is not invalidated, we suggest you:
- Turn off electricity, gas and water supplies at the mains and drain down all water systems except those connected to fire suppression systems or in use to maintain a sufficient level of heating to prevent freezing
- Ensure any intruder alarms, automatic fire alarms, automatic sprinkler installations or other fire suppression systems are in good working order and are switched on & in full operation
- Ensure that all points of access to the premises, such as doors and ground floor windows, are secured against entry by intruders
Remove all waste, unfixed combustible materials and gas bottles from the interior of the premises, including any communal parts, and store safely at least 3 metres away from your buildings.
- Make sure that an internal and external inspection of the building is carried out, preferably every 7 days, but at least in accordance with the minimum requirements of the applicable policy wording. Keep a written record of any inspections you make available should Insurers request to see these.
COVID-19 MAY UPDATE
It is now a month since our last briefing and in the intervening time we have been looking carefully at a range of issues that have been at the forefront of everyone’s minds.
As you should know from our relationship with you we are a proactive Insurance Brokerage who work hard to assist our customer’s to manage all their business risk, whether insured or otherwise. If there are any areas that you would like us to cover in further briefings please do let us know.
COVID BUSINESS INTERRUPTION CLAIMS
Obviously a number of our customers have enquired regarding possibility of cover for their loss of income following the COVID impact. We have been busy looking at the following over recent weeks:
- Reviewing Policy Wordings of our customers
- Looking at case law
- Consulting with BIBA and ABI guidance
- Following Claims Action Groups progressing through the market
Our findings to date can be summarised as follows:
- Business Interruption cover is designed to respond following property damage, so for cover we look to ‘non-damage’ extensions.
- The common extensions that may lead to cover are ‘Denial of Access’ and Closure ‘Infectious Disease’. These are standard clauses in all policies, but individual wordings differ greatly.
- Unfortunately most Insurance Policies appear to have clear definitions that would exclude losses resulting from COVID or another ‘new’ infectious bacterium/virus.
- A limited number of policies may have cover due to poor clause wording drafting, we are contacting Insurers to ask for clarification on these.
- Insurance Law firms are starting to publish guidance on their interpretation of these clauses, we are following these developments closely.
The Financial Conduct Authority recently advised that they would be bring a number of test cases to the courts quickly in order to obtain definitive judgements on the various clause drafting matters that may give rise to Business Interruption cover. We welcome this move and are watching that development carefully.
For the time being our advice to customers is to continue seeking any and all Government support made available to keep the business fixed costs covered and once the clarifications on Business Interruption cover become more clear we will assist those who can benefit to make claims.
If you would like us to consider a Business Interruption claim for your business please do let us know, email us on firstname.lastname@example.org
COVID-19 IMPACT: GETTING BACK TO BUSINESS
Since the Prime Minister announced a slow easing of the current lockdown rules last week, we have been thinking about what steps our customers need to take to get back to business.
One of the primary steps that is required is to develop an effective COVID-19 Risk Assessment to analyse hazards, prioritise risk control measures and demonstrate compliance with emerging Health & Safety Regulation guidance. We are currently working with partners in the Health & Safety Consulting profession to develop a simple to follow plan for the benefit of our customers.
In the meantime the Government has now published length documents covering a range of sectors providing the HSE guidance for managing the COVID-19 risk. We are encouraging our customers to make use of these guidance documents to produce a Risk Assessment and Control measures that will discharge your duty of care and protect your business from an outbreak. (Contact us for a relevant copy)
The guidance also includes a new COVID-19 RISK poster for display within the workplace, demonstrating the employer has taken the required steps to manage the risk and to give confidence to employees that they can return to work safely.
REMEMBER UNDER SECTION 44 OF THE EMPLOYMENT RIGHTS ACT 2006 EMPLOYEES HAVE A RIGHT TO DECLINE TO ATTEND THE WORKPLACE IF THEY FEEL THEIR HEALTH & SAFETY IS AT RISK.
We recently published a Homeworking Policy generously donated free of charge by one of our Legal Firm connections. The HSE and Govt are now starting to look more closely at all aspect of Health & Safety following the wholesale changes to business.
We would like to remind our customers that Butler Evans partner with major Credit Insurer Euler Hermes who are still offering a suite of protection for business form all sectors. If you feel this would be of interest please do get in touch.
This is a product that has seen very low levels of uptake across the whole Insurance Industry, however we are now seeing an increased need with many more businesses trading online with customers. Butler Evans have a wide range of insurer products to quote from giving a competitive policy with market leading coverage. Cyber Insurance protects you from loss of data or threat of hacking/data theft as well as legal liability such as Third Party claims and GDPR breaches.
With the future unknown and a predicted upsurge of company failures this year, all businesses should re-evaluate the benefit of Management Liability Insurance which includes personal liability insurance for Directors and other key persons. One of the most frequent ares of claims against Directors emanates from creditors following a company failure.
For further assistance call us on 08454310448