Business Interruption Claims: COVID-19
Many businesses have business interruption insurance. Whether or not they will pay out for interruptions as a result of COVID-19 is not clear. In fact, the advice from some insurance companies is that most policies will be unlikely to pay out for interruptions related to COVID-19. The gov.uk website notes that many policies only pay out for losses following damage to property. Even if a specific add-on for notifiable diseases was included with your policy, it is not clear if policies will pay out where there is no damage to property.
However, if there is a chance that you might be able to claim under your business interruption policy what could help with establishing your claim? Forensic accountants are often involved in quantifying consequential losses where things are not straightforward. In my experience, it is useful when quantifying losses to have information such as:
- Contemporaneous notes of work turned down and/ or cancelled. For example, email correspondence and notes of calls from potential or existing customers;
- Details of delays in the completion of work due to supplier delays or due to the disruption of staff having to work from home;
- If your business relies on customers walking through the door then an analysis of footfall and average customer spend;
- Details of extra costs incurred from having staff work from home (if indeed, they are able to work from home); and
- Details of any costs saved by closing or reducing staff onsite at offices/ shops/ factories.
It may not be clear for some time what losses, if any, will be covered by business interruption insurance. However, in the meantime, if you have insurance and there is a chance that you may be covered it can’t do any harm to keep as much information as possible regarding your losses.