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Business Insurance and Coronavirus

We understand this is an incredibly difficult time for many businesses affected by the Coronavirus outbreak and subsequent restrictions to movement.

With that in mind, we have produced this page in order to provide information and advice. Please find some FAQs below.

In line with UK market practice, our standard Business Interruption cover usually requires damage to property, such as storms or fires, in order to be triggered, which means the majority of customers will not be covered for Coronavirus.

We do have a small number of covers or cover extensions in operation which might be triggered. If you think you have one of these on your policy but are unsure, please refer to the FAQs below or alternatively contact us for clarification.

At NFU Mutual, we always seek to support our customers wherever possible and will look to extend cover whenever we can.

However, as a Mutual, one of our duties to our members is to remain solvent.
Global pandemics such as Coronavirus which affect everybody require societal solutions and larger financial packages from authorities and central Governments rather than cover from insurers, who underwrite known risks.

This is something the UK government is aware of. The Chancellor of the Exchequer, Rishi Sunak, acknowledged many businesses wouldn’t be insured when he announced his £330bn government support package for businesses.

He has since gone further for those affected, and promised to cover 80% of wages, up to £2,500 a month, through the Coronavirus Job Retention Scheme.

If interruption to your business is not covered by your insurance policy, we would advise customers to seek out the Government’s package of support for businesses.

Meanwhile, we will do all we can to support our members during these uniquely challenging times.

Frequently Asked Questions

There is no automatic extension of coverage from the Human Diseases BI policy extension available on commercial policies to include Coronavirus COVID-19 as a result of the emerging news that the Government has named the virus as a notifiable disease. In line with the rest of the market, it is not currently specified as a covered disease in our policy wordings at this time. 

Plague in the context of this wording means the Plague, an infectious bacterial disease also mostly known as The Black Death, the Pestilence, Great Bubonic Plague, or the Great Plague. This cannot be construed to include Coronavirus or Covid-19, which is a viral illness.

Yes, it is possible to add this extension, but we would reiterate that there is no cover for COVID19 under this extension, and there is no intention to add cover for COVID19 to this extension. 

RISCAuthority, a funded research scheme supported by a significant group of UK insurers that conducts research in support of the development and dissemination of best practice on the protection of property and business have produced a business continuity template for small businesses, which can be downloaded for free. 

Further information on Business Continuity Planning is also available from business continuity and risk management experts such as Inoni. Inoni have published a Business Continuity for Business blog. The blog is intended to support businesses with their pandemic planning. It includes a suggested approach and an opportunity to download their own Pandemic Plan as an example

 

If the customer cancels due to compulsory quarantine and you selected the optional cover extension for cancellation of advanced bookings on either a Commercial Select or Caterers Package policy subject to you offering accommodation, then there is cover under the extension for this product up to £1,500 for any one booking. The maximum we will pay in any one period is £15,000.

However, any covers added after 12th March 2020 will have an exclusion applied for losses arising out of coronavirus, mutations of coronavirus or diseases that result from coronavirus. For any customers who already have this optional cover extension in force, cover will apply as per the wording, but at renewal a Coronavirus exclusion will be added.

Yes, but any covers added after 12th March 2020 will have an exclusion applied for losses arising out of coronavirus, mutations of coronavirus or diseases that result from coronavirus.  For any customers who already have this optional cover extension in force, cover will apply as per the wording, but at renewal a Coronavirus exclusion will be added.

This extension is intended to cover losses due to closure or restricted access by authorities following a specific incident or occurrence happening within the specified radius from the insured premises, and not by a nationwide event or global pandemic that spans a substantial period of time.

An example may help in explaining the intention and operation of our extension. Our pricing and acceptance criteria are based upon cover responding where, for example, a fire in a nearby building gives rise to:

  • Debris blocking the safe approach to the premises;
  • The damaged building being declared unsafe, causing the local authority to prohibit access to neighbouring buildings;
  • A risk of explosion causing access roads to be blocked or buildings to be evacuated.

The extension is NOT considered to be triggered by Government “social distancing” advice. Nor is it triggered by the much firmer nationwide lock-down now in place, as this does not fulfil the wording’s requirement for a specific incident to have occurred near to the insured premises, nor has access to premises been hindered or prevented.

Yes and yes.  If you opt to include the Uncollected Milk extension on the Property Damage or Business Interruption sections of your policy this would respond in the event that milk could not be collected due to Coronavirus restrictions or impacts.

 

No. There must be a valid material damage claim for standard business interruption cover to operate.  In most cases there would have been no physical damage to property, and there is no insured peril in operation.

However, see the answer to Q6.

No. NFU Mutual will not pay for any loss of this nature as result of an infectious or contagious disease

However, see the answer to Q6.

No.  NFU Mutual will not pay for any loss of this nature as result of an infectious or contagious disease.

However, see the answer to Q6.

 

We define certain Human Diseases which we will provide cover for Under the Loss of Profit cover within the Holiday Accommodation extension under the Home and Lifestyle, Buildings Plus and Contents Plus and NFU Mutual Bespoke product only. Coronavirus is not classed as one of these diseases, so would not be covered.

However, should the virus be detected within the property and it have to be closed, policy coverage may be triggered.

However, any covers added after 12th March 2020 will have an exclusion applied for losses arising out of coronavirus, mutations of coronavirus or diseases that result from coronavirus.  For any customers who already have this optional cover extension in force, cover will apply as per the wording, but at renewal a Coronavirus exclusion will be added.

 

No. Your policy has an exclusion under the Accidental damage cover that excludes all pollution or contamination of property.

Yes, if you opted to include the Uncollected Milk extension on the Property Damage or Business Interruption sections of your policy.

Possibly. It may be difficult to prove when and where a claimant was infected, but if they could, and you were legally liable for their illness, then they may be able to bring a claim under your public liability policy.

Possibly. It may be difficult to prove when and where a claimant was infected, but if they could, and you were legally liable for their illness, then they may be able to bring a claim under your employers’ liability policy.

No. There must be a valid material damage claim for the business interruption cover to operate. In the example given, there would have been no physical damage to property, and there is no insured peril in operation.

We DO regard compulsory quarantine as, either:

  • Compulsory quarantine imposed by the government.
  • Self-isolation advised by a doctor or other medical professional (e.g. advice from NHS111) where an individual has specifically sought medical advice.
  • Self-isolation based on the general advice on an official website (e.g. gov.uk or nhs.uk), provided the individual falls within the criteria being given, e.g. has just returned from one the areas where self-isolation is advised such as Hubei province, Iran or parts of northern Italy or South Korea.

But we DO NOT regard compulsory quarantine as:

  • An individual deciding to self-isolate, but this isn’t following official guidance or advice, e.g. just returned from holiday and has no symptoms (i.e. they are just being cautious)

Broadly speaking yes. 

For the motor risk: in many cases cover will already exist if the correct class of business use has been selected, including for those drivers involved.  If new drivers need adding or the business use on the policy needs changing, policies can be amended as necessary, however we will apply our existing acceptance criteria for additional young driver risks. 

For commercial risks:  the business description should be checked and policy amended to ensure the right level of cover is in place.  It is also important to check necessary controls and risk assessments have been undertaken, such as to ensure precautions for keeping food heated/chilled appropriately are followed.   

We believe the Chancellor was referring to the Human Disease Extension that may be added to Business Interruption policies. An ABI statement, which can be found here summarises the market’s position.  

With regards to NFU Mutual policies. There is a Business Interruption extension available for human diseases, which provides cover if the premises has to close and for a specified list of diseases. Unfortunately, COVID-19 is not included on that list. (see question 3.1) 

In line with most other insurers, when COVID-19 was added to the government’s list of notifiable diseases, this did not change policy coverage. 

We use this clear-cut approach of naming individual diseases rather than referring to notifiable diseases because generally we cannot cover risks we can’t suitably assess. 

Your public liability insurance will cover any person, other than an employee, who suffers an injury for which you are legally liable while they are visiting your premises. So, while your public liability cover will apply, this will only be for isolated circumstances and individual children. If you provide broader nursery/creche arrangements these will not be covered as part of your normal business cover.

There are a number of factors you need to consider eg.: Is the building/premises suitable/safe for a child to be in? Who will be responsible for the child while on the premises? Will the child be supervised at all times by an adult?

The overriding Government advice is employees should themselves work from home, where possible, and that social distancing needs to be practised. Allowing more people (children) into the workplace is counterintuitive to this advice.

No, cover would not be triggered. The cover only triggers if the licence is lost as a penalty for wrongdoing under legislation or there is refusal to renew by the licensing authority. 

Yes, your farm public and product liability insurance will automatically include farm gate sales of milk providing the sale of unpasteurised milk is in accordance within the current regulatory framework. 

If a business extends its normal business activities to provide services or products to the local community on a voluntary basis, we will consider this as part of its normal operations and cover will apply. So, for example if a restaurant provides food free of charge to local vulnerable people, via a personal delivery service, we would consider this to be covered by their existing Employers Liability and Public/Products Liability covers.  

Where a business is materially changing or extending its usual services or product range, even where this is to provide services or products on a voluntary basis, we would need to be informed.  For example, it has been reported that distilleries are switching production to make hand sanitisers, due to their access to supplies of ethanol.  In these circumstances it is a material change to the business and we would need to be given the opportunity to assess the risk, pricing and ensure that the right cover is in place.   

We will seek to support our customers wherever possible and will look to extend cover in most cases.  

As the building is unoccupied for more than 30 days, the customer should notify us that their building is unoccupied. They should try to comply with all the conditions, and we ask that they confirm any conditions where they are not able to. We expect conditions a) to g) and j) to be complied with as they should be straightforward in most cases. We also require h) and i) to be complied with, but if they are unable to arrange inspections during the self-isolation period, we agree to put this aside and cover will not be affected.

Conditions for reference:
a) all mains supplies of electricity, gas and water are turned off at the point of entry to the BUILDING (except as necessary to maintain security systems, fire alarms, safety lighting, sprinkler installations and central heating systems);
b) all security protections are put into full and effective operation;
c) all external doors are kept securely locked;
d) all windows are closed and secured;
e) all letterboxes and openings are sealed;
f) the BUILDING is maintained in a good state of repair;
g) all waste, combustible materials and gas bottles within or outside the BUILDING are removed from the premises;
h) make a weekly inspection of the whole BUILDING both internally and externally and remedy any defects found;
i) keep a log of the inspections in h) above including a record of any defects found and remedial actions taken, to be available for inspection when requested by US; and
j) notify US if the BUILDING is to be occupied by contractors for renovation, alteration or conversion of the BUILDING or if the BUILDING becomes occupied, tenanted or actively used.

At this time, we understand that some customers may need or choose to lay-up vehicles.  If these are laid-up due to a Coronavirus related loss of trade and consequently are expected to be laid-up for an extended period, it is fair to reflect this in the rating and allow a return premium to reflect the reduced exposure.  

When not in use, the full extent of cover provided by the policy will continue to apply to the laid-up vehicles, as blanket certificates are provided to fleet customers.  This means it will not be necessary to SORN the vehicles and they will remain on the customer’s MID record. 

This provides customers with the flexibility to utilise the laid-up vehicles immediately again, once required and we would of course expect the customer to let us know at that time. 

The number of vehicles being used by a fleet is a key underwriting factor. Normally the number of vehicles being used is relatively stable and this information is collected periodically to adjust pricing, usually at renewal.  It is acknowledged by us and the customer that there are likely to be small fluctuations in the actual number of vehicles on the road during the year (both up and down).   

At this time, we understand that some customers may need or choose to lay-up a larger number of vehicles than would normally be anticipated at any point during their usual trading cycle. Where this happens and this represents a material change to this risk, we will reflect this in the premium being charged and allow a return premium to reflect the reduced exposure. So, for example, a fleet of 20 vehicles, where one is laid-up, is not really a material change outside that which could happen at any point during normal trading.  However, if the same customer has laid-up 10 vehicles due to a Coronavirus related loss of trade, it would be fair to reflect this in our pricing.  

When not in use, the full extent of cover provided by the policy will continue to apply to the laid-up vehicles, as blanket certificates are provided to fleet customers.  This means it will not be necessary to SORN the vehicles and they should remain on the customer’s MID record.  

 

This provides the customer with the flexibility to utilise the laid-up vehicles immediately again, once required, and we would of course expect the customer to let us know at that time.