With an increasing number of events being cancelled or postponed in the midst of the coronavirus outbreak, many businesses across the country are starting to wonder whether they can recoup any of their costs.
After much pressure from businesses across the country, the government has finally followed in the decisive footsteps of Scotland and Ireland and clarified its stance on how the coronavirus and insurance should be handled.
As such, coronavirus has now been reclassified as a ‘notifiable disease’, allowing businesses in England and Wales to claim damages from their insurers as a result of the outbreak. At last, some good news for business owners – but what should they do now?
James Fownes, Property Disputes Partner at leading law firm Shakespeare Martineau, shares some key tips with Business Leader:
Q: What is a ‘notifiable disease’?
The government has made coronavirus a notifiable disease which means that medical professionals now have a legal obligation to report all cases of the virus to Public Health England.
Q: How does this affect me and my business?
The reclassification of Covid-19 to a notifiable disease means that some existing business insurance policies now protect firms for many of the losses associated with the virus.
Q: What can I claim for?
Subject to individual policy wording, companies may be able to seek compensation through their insurance policies in the event of any cancellations that have had to be made as a result of the virus spreading. This is unlikely to operate retrospectively. However, those who had intended to go to events such as MIPIM and are unable to attend the rescheduled event in June, may now be able to claim their losses on their business insurance.
Q: What insurance do I need to have?
Business interruption insurance should be taken out to protect you and your business in the event of disruption, not after it has happened. Therefore if you didn’t have insurance ahead of booking business events, it is likely that you’ll remain out of pocket. With further events likely to be cancelled in the near future, ensuring that you have the appropriate protection in place is a wise move.
Q: Will standard business insurance cover it?
Business insurance comes in many forms, but the standard packages typically cover for ‘common’ risks – of which coronavirus is not. However, many businesses purchase insurance cover that extends beyond the basic packages and businesses should make sure they check what they are and are not covered for.
Q: Can I recover my accommodation costs?
When booking accommodation and such it is important to check the ‘right to cancel’ provision which you would have agreed to upon confirming your booking. Different places are likely to have differing policies, so it is worth checking your rights on a case-by-case, place-by-place basis.
Q: My suppliers are not delivering what they promised – what can I do?
It is crucial to check your supplier agreements to ensure that you know where you stand and what each party’s obligations are.
Businesses facing difficulties in meeting their contractual obligations as a result of the coronavirus outbreak should check whether a ‘force majeure’ provision is included in the agreement. A force majeure provision can excuse one or both contracting parties from performing their obligations, in certain defined circumstances, as long as the disrupting event was beyond the reasonable control of the party relying on the clause. However, the wording of the provision is key.
Q: What do I do if suppliers aren’t refunding me?
This is where checking the small print can really pay off. Ensuring that the terms and conditions of contracts are understood by all parties will ensure that you receive your money back when it is due.
Q: Does how I paid change anything?
Your rights can vary depending on the method of payment that was used. For example, if you paid by credit card you are legally entitled to a refund if you do not get what you a promised.
Q: Can I recoup the costs of business flights?
It is best to check with individual airlines and confirm what they are offering before claiming your flights through your insurance. Always check your travel insurance policies before you intend to travel. These should be booked when your tickets are purchased, not when you are due to travel.
The escalating scale of coronavirus continues to pose a threat to businesses and while many are still planning for events to go ahead, businesses across the UK should take this opportunity to review their continuity plans to ensure that they are prepared should any further disruption occur.