'Vast majority' of companies not insured for coronavirus closures

A majority of companies do not have insurance in place to protect them if they collapse because of coronavirus, it was warned on Tuesday, even if the government orders businesses to close.

In a statement, the Association of British Insurers said: “Irrespective of whether or not the government orders closure of a business, the vast majority of firms won’t have purchased cover that will enable them to claim on their insurance to compensate for their business being closed by the coronavirus.”

The trade body said standard business interruption cover, which most companies take out, compensates for incidents such as fire or flood but does not include forced closure by authorities.

“A small majority of typically larger firms might have purchased an extension to their cover for closure dur to any infectious disease,” the ABI added.

“In this instance, an enforced closure could help them make the claim, but this will depend on the precise nature of the cover they have purchased, so they should check with their insurer or broker to see if they are covered.”

On Monday, the government advised people to stay away from pubs, clubs and restaurants. The advice caused panic across the hospitality industry, which has warned that hundreds of thousands of jobs could be lost. An ever-growing number of sporting events have been cancelled or postponed, including the Grand National and Euro 2020, and on Tuesday, the UK’s biggest cinema chains announced they were temporarily closing venues in response to the outbreak.