How Does Business Insurance Help During Covid-19?

How do I confirm if my business is covered for claims relating to Covid-19?

We appreciate that many business insurance customers have questions regarding their policy cover in relation to Covid-19.

Due to the wide variety of policies we provide, to confirm your eligibility for cover for claims relating to Covid-19, please either:

  • Contact your normal Towergate adviser and we will respond directly to you.
  • Get in touch using our contact page, quoting your Towergate reference, full policyholder name and address, and we will contact you directly.

Help for businesses during the Covid-19 outbreak

If you want support with your business at this challenging time, read useful articles in our coronavirus information hub.

How is Towergate helping customers during the Covid-19 outbreak?

While the scale and impact of the current coronavirus (Covid-19) outbreak remains unknown, Towergate has been working for some time to prepare for all potential outcomes for our business and to support clients and customers through this sustained period of uncertainty.

We have a range of plans in place across The Ardonagh Group to serve the needs of our clients without interruption, while protecting the health and safety of our colleagues and other stakeholders. 

Read more

Am I covered for business contents whilst working from home?

Many policies, in recognition of the increased numbers working from home during the current period, have clarified and/or adapted their business contents cover as follows:

  • Some have automatically extended cover to include business equipment in the home of a director or employee up to a specified limit, but you should note this does vary according to the policy.
  • Some policies already include cover for business contents temporarily away from the premises extension, including the home.

Am I covered for business interruption losses due to Covid-19?

As has been widely acknowledged, it is unlikely most UK businesses will be able to claim for disruption caused by Covid-19. Standard business interruption cover bought by the vast majority of businesses is intended to cover interruption caused by physical damage (i.e. a fire or flood) at a property, resulting in a reduction in turnover or being unable to trade.

Some policies include an extension for interruption due to infectious diseases occurring at the premises or within a certain ‘specified distance’, (variable, based upon insurer and type of policy). Where they do, these policies will include a list of ‘specified notifiable diseases’. Consequently, new and emerging diseases, such as Covid-19, are usually not included. Typically, these will also exclude SARS, MARS, Ebola and other influenza-type diseases.

Contact us directly to confirm if any cover is applicable based on the particular circumstances and cover applicable to you. We will aim to respond within 48 hours.

Do unoccupancy conditions still apply if my business is closed?

Most of our products and schemes contain unoccupancy conditions that require you to inform us of permanent unoccupancy beyond a specified period, usually 30 days. In the current Covid-19 crisis, insurers are helping customers by increasing the period of unoccupancy automatically. This varies based on policy, so it is important that you contact us for guidance.

There will be specific guidance for each policy on how to protect property in such circumstances, stressing that you must adhere at all times to the UK government's Covid-19 guidance. These conditions restrict cover and explain the action you must take to protect your property during this period. As this varies by policy it is important to check your documents, and if you are unable to comply it is imperative that you contact us.  

Is employers' liability needed for homeworking or furlough staff?

Yes, office staff working at home and / or furloughed during the current situation are still under a contract of employment with you. Employers' liability insurance is a legal requirement for limited companies, partnerships and sole traders when they employ staff, and this has not changed. 

Limited companies who have only family members as employees are still required to have employer liability insurance. The exemption for family members only applies to family businesses (such as sole traders or partnerships) whose employees are only family members.

Do I still need business interruption cover during the crisis?

Yes, you should continue to maintain your business interruption cover at this time even if you are not currently trading, as losses caused by fire and flood can still occur.

Severe destruction or damage may result in your business suffering a reduction of income until such time as the damage is repaired and re-open and fully recover your business. During this period of recovery, you will require insurance to help pay towards those continuing overheads that apply such as rent, rates, utilities, and wages.

What about my unoccupied commercial premises?

Most commercial property insurance policies contain unoccupancy conditions that require you to inform us of unoccupancy beyond a specified period, usually 30 days. These conditions restrict cover and explain the action you must take to protect your property during this period, and because this does vary it is important that you refer to your policy.

In the current Covid-19 crisis, insurers are helping customers by increasing the period of unoccupancy automatically. This varies based on insurer, so it is important that you contact us to discuss any unoccupancy clauses in your policy. Some insurers are being flexible in the current situation as to how long a property can remain unoccupied, but the details depend on your specific policy, so we would always advise you speak to us.

Guidance will have been issued for your policy on how to protect property in these circumstances, stressing at all time that you must adhere to the Government Covid 19 guidance. If you are unable to comply with this guidance, then it is vital you contact us.

Find more advice on managing unoccupied commercial property at this time.

Do I still need public liability cover in place?

Yes. If a property damage claim arises as a result of defective work carried out by you, you will only be covered if you have a public liability policy in force at the date of the loss. Losses can continue to occur during the period whilst your business is temporarily suspended.

Do I still need to keep my my tools and equipment under cover?

Yes. Keeping your tools and equipment secure and safe from damage is a high priority right now, as you’ll need them when our working lives resume. Accidental damage and theft can still occur, so it is as important as ever now to keep them insured and avoid the extra cost of having to replace them if you don’t have any cover.

Please note that all tools and equipment must be stored in a securely locked building. They will not be insured if left in store in your van/vehicle at this time.

Help for businesses facing financial difficulties due to Covid-19

We appreciate that Covid-19 is having an adverse effect on many individuals and businesses. If you are facing temporary financial difficulties, please contact us as soon as possible to discuss your options. We are here to help you and support you - options may include:

  • Re-assessing your demands and needs
  • Considering if there are other products we have available, that may be more suitable for you at this time
  • A tailored solution to suit your circumstances e.g. a temporary payment deferral

See additional information on the Premium Credit website.

Useful information is available from the FCA page Dealing with financial difficulties during the coronavirus pandemic, where you can also find information on Money Advice Service’s Money Navigator tool and other and other guidance including how to create a budget and prioritise your payments.

About the author

Mike Stephens FCII is a respected senior industry professional and Fellow of the Chartered Insurance Institute (CII) with well over 40 years’ varied experience in the commercial insurance sector as a director, underwriter, and operational improvement manager.