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What's the story?

With the coronavirus now declared a worldwide pandemic, the impact on the economy as a whole, and on businesses in particular is becoming a reality, after careful review of the business interruption policies sections the following concerns have been raised with regards to the availability and extent of the cover provided, the associated costs of the cover, and the impact Covid-19 will have on such policies responding.

Business Interruption insurance

The standard Business Interruption insurance cover is dependent on cover/perils provided by the underlying material damage (Fire and allied perils) policy and will therefore not respond to losses such as the Covid-19 pandemic normally covid-19(see attached policy wording extracts).

Are you covered?

Most policies don’t provide any cover for contagious or infectious diseases, those that do will typically exclude COVID / Corona Viruses (there are exceptions where cover would be provided, namely hospitality and travel policies).

Exposure and benefits of both business interruption coverage (covering the insured's losses from an abrupt shutdown) and contingent business interruption coverage (for losses resulting from the closure of an insured supplier) usually require some form of physical loss or damage and liability under another section of the policy, for example, a fire section, or office contents or other material damage insurance.

If the property remains habitable but the business is closed because of the fear of coronavirus, the physical loss requirement is not met. Where a person enters the property and physically contaminates it, then the physical damage requirement may be met. That is a factual enquiry and depends upon the definition and interpretation of what constitutes damage in the policy.

Keep your employees safe

As a loyal MBFS customer, you already get the advantage of some great deals. But, as an added bonus, Maintenancesure is offering an incredible 30% discount on their sanitising services! Simply use the promo code ‘Claims Ready’ to enjoy the discount.


Policy wordings may also exclude damage arising from contamination, or more expressly pathogens, bacteria, viruses or disease-causing agents, or go a step further and exclude cases arising from epidemics or pandemics. These exclusions are commonly found in reinsurance contracts which will increase exposure. The special and general conditions, exceptions and exclusions to the policy must be considered.

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