Insurance
Act now Capital law’s Catrin povey offers bar operators adviCe on business interruption insuranCe
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atrin Povey, who leads Capital Law’s insurance practice, says drink sector businesses that have been impacted by coronavirus should double-check their business interruption insurance policy and make a claim before it’s too late.
Catrin Povey
24 www.barmagazine.co.uk
Business interruption insurance is intended to cover financial losses where business operations have been interrupted because of unexpected events causing damage to the property insured. Yet, because most standard policies are designed to cover damage caused by events like fire, flooding or earthquakes, many bars have experienced difficulties in claiming and accessing business interruption insurance to cover the losses they suffered as a result of Covid-19. This doesn’t mean that business should automatically accept their insurer’s denial or assume that they are not covered. Each policy is unique, and whether a claim is possible depends on the exact terms of the policy. If the wording is ambiguous, the policy should be interpreted in favour of the insured. To limit exposure and contagion, Government first advised the general public to avoid pubs, bars and restaurants on 16 March, leading to forced closures on 20 March. This forced closure means that you may be able to make a claim through numerous policy extensions, such as public
emergency, Government or local authority action or denial of access. You may also be able to claim business interruption insurance if a confirmed case of Covid-19 has been found on (or within a certain perimeter of, depending on the wording) your premises after the virus was officially recognised as a notifiable disease, and provided that your policy includes a notifiable disease extension. This extension may be linked to a specific list of notifiable diseases not including Covid-19, which was unknown at the time the policy was drafted. In this scenario, the insurer is likely to refuse cover, but you may be able to argue that it hasn’t been specifically excluded either. These examples are not exhaustive as each establishment is in a different situation and each policy is unique. Now is the time to get your policy reviewed by a professional as most policies set out claims conditions requiring policyholders to notify them of an event “immediately”. There are also likely to be conditions requiring you to notify the insurer that your premises are vacant and to check them regularly.
