McParland Finn issues Coronavirus update
On 8 April 2020, Kevin J McParland, Executive Chairman of McParland Finn, issued the following update:
Business Interruption Cover – Covid-19
The impact of the Coronavirus outbreak has been on an unprecedented scale and no aspect of daily life has been unaffected by the global pandemic. Whilst the virus can have a serious impact on the people directly affected, for many the restrictions imposed by the Government have made things a little less convenient in their personal lives. Unfortunately, while potentially saving lives, those restrictions are likely to have a more significant impact on many companies .
On the 5 March 2020, a statutory instrument was passed into law designating ‘Covid-19’ as a notifiable human disease, with the statement then being issued by the Government indicating that this would allow claims to be made under insurance policies. Unfortunately, the situation in terms of policy coverage is not as straightforward as that statement would suggest.
As a prudent business owner, you have Office Insurance with Hiscox under our facility, and this policy does contain cover for ‘Business Interruption’ claims. However, at this stage, it is far from clear to what extent the policy will respond to any claims in the current circumstance.
The policy wording contains a number of provisions setting out what is covered but, for the most part, these are tied to actual damage to the property. While it is possible, the Government or regulatory pressure may cause the nature of this definition to be reconsidered, at present no damage has occurred to the property. However, the policy does contain the following conditions:
“… [Hiscox] will insure you for your financial losses and any other items specified in the schedule resulting solely and directly from an interruption to your business caused by: -…-
Your inability to use the office due to restrictions imposed by a public authority during the period of insurance following:
b. an occurrence of a notifiable human disease …”
In view of the conditions of the policy wording, it is possible that some cover may be in place, but this will be restricted to those financial losses that can be solely and directly attributed to your inability to use your office during the current crisis.
At this stage, the unfortunate reality is that the stance being taken by Insurers in relation to claims arising out of the Covid-19 pandemic is, like the pandemic itself, an evolving situation with the outcome being far from clear. However, to safeguard your position as far as is possible, we would recommend that you continue to act in a reasonable and prudent manner in maintaining your business insofar as is possible and would suggest that you:
- Ensure you retain records of any additional costs and expenses you have incurred in dealing with the current crisis (i.e. the cost of purchasing additional laptops to allow staff to work from home).
- Keep records of all rent payable and bills that fall due during the current ‘lockdown’ period.
We will continue to closely monitor the situation and will provide further updates as and when the position with Insurers is clarified. In the meantime, while we appreciate that this may not be the update you were hoping for, we at McParland Finn would like to reaffirm our commitment to helping you obtain the best possible results from an insurance perspective as the situation continues
We will provide you with relevant updates as matters continue to evolve and advise of any further action you may need to take.
Kevin J McParland