Coronavirus resources – insurance

Hayes Parsons Insurance Brokers has prepared the following Frequently Asked Questions, containing many of the questions we have been posed since the outbreak of the Coronavirus pandemic.

Unfortunately, insurers have chosen to release updates on their policies individually rather than as a group or via the Association of British Insurers, and at different times, with some reacting very quickly and others only now releasing their updates. For this reason these FAQs has been kept generic in nature as several insurers provide policies for museums and venues, and this does not replace bespoke, individual advice which should be provided directly by your insurance broker/insurer.

I have Business Interruption insurance, am I covered?

The vast majority of organisations do not have cover for Coronavirus under their Business Interruption insurance.  Not all insurance policies are drafted clearly, and the best way for us to confirm whether you are covered or not is to contact us or speak directly to your insurance broker/insurer.  Contrary to what you may read on social media or even via trusted news sources, the change in the Government’s stance to “lockdown” and for museums to close will have no effect on the majority of insurance policies.

You have confirmed my Business Interruption insurance does not cover the Coronavirus, why doesn’t it?

A global pandemic of this nature is not viewed as insurable, as insurers would not be able to meet the liabilities in covering the lost turnover of the whole country.  Many insurance policies cover certain specified infectious diseases, but the list is of those that are likely to cause local disruption, and not disruption on a national scale and over many months.  Even if there was insurance cover in place, the insurers would not be able to meet the many hundreds of billions of pounds that will be required and you would not be able to afford the premium being offered. The only organisation with the ability to provide support in the event of a global pandemic is the Government.

What happens if my museum or another property becomes unoccupied during this period?

Insurers’ definition of unoccupied differs from what we would normally consider as unoccupied. Insurers will consider a property unoccupied if it is not visited for a certain period of time, normally around 30 days. After this period cover can be restricted, often automatically, and certain conditions are put in place to manage the increased risk. Most (not all) insurers have confirmed that they will not consider a property unoccupied during the lockdown period and therefore conditions for unoccupancy will not apply. Please note that properties unoccupied prior to the lockdown will still be considered unoccupied, and therefore any unoccupancy conditions will apply. If you are unable to comply with any of these conditions, such as regular inspection, please consult your insurance broker/insurer.

I have stopped regular maintenance of my buildings. Will that invalidate my buildings insurance? 

There is likely to be a “reasonable care” condition within your policy, requiring you to maintain your buildings and take reasonable care. During the lockdown period, it is likely insurers will take a pragmatic approach to this condition. However, any urgent repairs which will affect the security of the premises or people’s health and safety should still be undertaken, and any more significant issues should be referred to your insurance broker/insurer.

I have items of plant which are required to have a statutory inspection, should I continue with this inspection? 

There has been no change at this point with the relevant inspection legislation, meaning items must still be inspected and a certificate issued. If this is not possible, either because you are not at the museum, or because the inspection company are unable to visit, you should ensure the item is taken out of service and not used until the inspection has taken place in the future.

Do you recommend any actions I should take to secure my museum during this period?

Yes, there are several actions you can take to further secure your museum during the lockdown. These include turning off the utilities, ensuring security lights are functioning and alarms are set, and organising regular inspections where possible.

Ecclesiastical have produced a helpful guide on the management of unoccupied premises which can be found here – https://www.ecclesiastical.com/documents/unoccupied-buildings.pdf 

Alternatively, additional information can be found on our hub – https://www.hayesparsons.co.uk/policy-conditions

If I want to take my child to work, am I insured?

Yes, but insurers will want to see some risk management procedures, such as:

1. Risk assessing and ensuring the site is safe for the child to be in
2. Following Government guidelines around self-isolation and third party visitors

What cover do I have for working from home?

You do not need to arrange for additional liability insurance providing you do not have business visitors visiting your home regularly.  You may however have significant amounts of organisation owned computers and contents at home, and you may need to inform insurers of this to ensure cover extends outside of your normal place of work. Some insurers have now agreed to extend cover to employee’s/volunteers homes without charge or the need to notify them, for the period of the pandemic.

I have travel insurance.  Am I insured for cancellation of international trips? 

Where the government has advised you not to travel, you can cancel your trip and make a claim for any part of the costs which are not recoverable, providing you made the booking before you reasonably considered cancellation was a possibility.  If the trip is in advance and it is not currently advised not to travel, you will not yet be able to make a claim.  Please note, it is increasingly likely that cancellation cover due to Coronavirus will not be available in the whole insurance market for new trips from now on and at any time in the future.

I have read that there is an increase in cyber attacks following people moving to remote working?

Unfortunately there is evidence of a significant increase in cyber attacks.  Existing cyber insurance should cover these attacks, subject to normal terms and conditions of the policy, and if you wish to discuss cyber insurance please get in touch.

CFC have created a guide for working from home, which can be found here –

https://www.cfcunderwriting.com/resources/advisories/2020/03/client-advisory-cybercriminals-exploiting-coronavirus

I am considering reducing the number of staff I employ; do I need to tell insurers? 

If you have Directors & Officers/Employment Practices Liability insurance or Legal Expenses, it will be a condition of these policies to notify insurers prior to certain HR actions including redundancy.  We strongly recommend the insurers advice helpline is contacted prior to any actions, or please contact us to discuss further.

I have a motor vehicle due for MOT but am unable to take it to the garage during the lockdown period. Am I still insured? 

The Government has extended the MOT expiry date for six months for any vehicle due to expire on or after 30 March 2020. Any vehicles due for an MOT before this date must be tested. This extension is for vehicles, motorcycles and light vans and there are different rules for larger vehicles.

Do you anticipate insurance premiums increasing? 

Even before the Coronavirus pandemic, insurance premiums have been increasing, with the financial results of insurers mostly deteriorating in the last couple of years. Whilst most organisations will be unable to make a claim, the ABI still estimate the costs to insurers to be over £1bn in claims, and this is before you consider lost and reduced premiums as cover is cancelled or slimmed down. You should therefore budget for insurance to increase in the coming months. At this stage it is not possible to estimate by how much, but it is still the case that the UK has one of the most competitive insurance markets in the world, which should help keep increases down. A specialist museum broker who approaches the insurance market will be able to obtain several quotations for you.

Further information

In order to keep the plethora of guidance, information and insurer updates in one place, and to avoid incorrect information (much of which has been circulating on social media and in some of the press), Hayes Parsons has created a Coronavirus hub on their website, which is being updated daily. We recommend checking the site regularly to keep up-to-date with the changing insurance landscape. www.hayesparsons.co.uk/coronavirus