20th March 2020
Swim schools are businesses – and like all other businesses are subject to uncertainties and risks: some known and some unknown. Some expected and some unexpected.
Whilst insurance really started to cover shipping and overseas trading, the first ‘non-marine’ policies covered fire – and nothing else. Over the centuries the insurances provided have become wider and wider in scope; covering all sorts of potential risks and liabilities. However, what is insured is clearly-stated.
Business Interruption was a follow on from fire. (If your premises burn down you cannot trade so need help to continue.) In my experience most people under-insure their business interruption risk; very often intentionally to save a few pounds on the insurance cost. Of course, following a claim they then get less than they need to survive.
It is still the case that Business Interruption insurance is property based. If you cannot trade because of damage to (or loss of access to) the premises the ‘BI’ cover will kick in (providing you have asked for the cover!). The Infectious diseases cover is a comparatively recent introduction. Clearly, an infectious disease will not damage a building – but it may deny access to the building. Many insurers have added Business Interruption caused by Notifiable Disease as a policy extension. However, each insurer has approached this in a different way. Insurers might:
- List the diseases that are included
- List the diseases that are excluded
- Exclude Notifiable Diseases
- Exclude all diseases unless notifiable
Some insurers have extended the cover to apply to certain geographical areas. Those areas might be quite restricted – or might be very broad.
The only thing you can be sure about is that each policy will almost certainly be different to the next.
Various issues and questions have been raised on social media. Where we are aware of those questions we will endeavour to answer them here:
SAT: I contacted my insurance company to see if I could claim for loss of earnings due to the pool closing. They said I am not covered as the virus was not part of the specified diseases section.
This particular policy was issued by AIG who list the diseases they will cover. It is important to remember that the policy is a standard document updated from time to time.
JH responded to this post by posting The virus was known about in China in late November and in the rest of the world in early December. Insurance companies will make any excuse not to pay.
It is important to understand that insurance is designed to provide help following a possible specified risk occurring unexpectedly: Typically, a fire in your home or water damage caused by exceptional rainfall – or an overflowing bath. When COVID-19 became recognised as a potential pandemic it was no longer ‘unexpected’ and as such was uninsurable.
LR wrote – Yes we had the same and no insurance in the world will cover you very frustrating we have closed.
It is true to say that this is generally the case – especially for smaller businesses. There are one or two rare exceptions and some larger companies may have paid very large premiums to buy broader bespoke cover.
KI wrote I belive BGi.uk.com have two companies they use. From the e-mail they sent 1 policy responds ant the other does not.
In fact, BGi.uk.com have several policies. No two swim schools are the same and we endeavour to provide the most appropriate cover to each client. KI is correct in saying that one policy does specify the diseases included and the other offers a much wider definition.
SAT subsequently wrote BGi.uk.com is the Company! They have listed 34 diseases why didn’t they consider corona? I feel they haven’t done their job properly are they not experts or are we expected to know about these things.
BGi.uk.com will be the first to accept that we are not experts in World diseases, possible pandemics, etc. etc. However, we are not bad at insurance. Within the UK Insurance market there are a number of insurers who will provide Swim-School and Swim-Pool Insurance. Each of those insurers will have a policy wording; tried and tested by their lawyers. All we can do as brokers is to scan the market for opportunities and find the best policy available at the time. Occasionally, we can persuade the insurers to provide small enhancements – and this we do whenever we can.
On the matter of viruses, we encourage all of our clients – Swim Schools included – to consider Cyber Insurance. Not very many choose to insure against computer viruses: possibly because they don’t think they will be affected, possibly because of the cost. I can see the same set of questions arising in the event of an unexpected Cyber attack – launched purposefully or accidentally.
Would you be insured against computer viruses if there was a sudden electronic viral pandemic?
MJ has hit the nail on the head when he writes BGi.uk.com seem to be paying out for some but not others – it seems VERY much to depend upon when you took out the policy and how old it is as well as with which underwriters.
The differing policies all have similar – but slightly different benefits, enhancements and conditions.
LG wrote – nope – they’re not paying out. My insurance company is swimsure. They won’t pay for loss of business
DT responded I’m with BGi.uk.com and feeling quite positive so far but no doubt there will be a clause somewhere. I’m waiting to hear.
Understandably, BGi.uk.com (nor the insurers) have ever dealt with a Business Interruption Claim resulting from COVID-19. Because of this, we are unable to rely on past experience of how claims have been handled. This is a new experience for us all.
It is true to say that different people will interpret policy wordings in different ways. We are now beginning to submit some claims to the loss adjusters and we should soon be better placed to understand how insurers will deal with the claims.
There has been some comment on the claims form issued by the loss adjusters appointed by insurers.
When asked if a claims form had been completed DT responded – yes, such as it was!! N/a to most of the form but at least it’s registered!
When asked if was insured by BGi.uk.com MP responded Yes, but I read it, my head wobbled, and I’ve put it top of tomorrow’s to do list.
The claims form was given to BGi.uk.com by the loss adjusters appointed by the insurers. It is not really well suited to the claims being made – but as DT says, it will be accepted by the loss adjusters to register the claim. Business Interruption claims can only be finalised when the total loss payable has been calculated and agreed.
JLP advises – I was told I wouldn’t be able to make any claim for loss of earnings. Unfortunately, we cannot trace you on our systems – but if you have Business Interruption Insurance with us, please complete a claims form and send it to claims@BGi.uk.com
Further updates will follow.
For more information on CV-19 please see https://bgi.uk.com/covid-19/