Insurance FAQ’s and Information relating to COVID-19
Business Interruption / Loss of Rental Insurance
Will my business interruption insurance cover me for any loss of revenue / loss of rental suffered as a result of the COVID-19 virus?
This may include reduced sales and additional expense relating to conducting business, cleaning of premises and losses due to the cancellation of events.
Business interruption insurance policies generally cover financial losses (including loss of rent) resulting from damage, so regrettably insurance coverage does not apply where there is no damage.
Business interruption insurance policies exclude cover for any diseases that have been declared to be notifiable or ‘quarantinable’ diseases under the Commonwealth legislation. As COVID 19 has been declared by the Federal Government as a listed human disease under the Biosecurity Act 2015, the policy exclusion applies, and as a result, business interruption losses directly attributable to COVID19 are not covered by insurance. At this point insurers continue to confirm to us that no cover applies.
Unfortunately for many in Australia, there is no insurance protection for a downturn or a closure of your business.
Public Liability Insurance
If a third party suffers loss and alleges negligence regarding your management or handling of your COVID-19 response and decides to claim against you, would a Public Liability policy respond?
Subject to terms, conditions and exclusions of the policy, there is a strong position that the policy would respond.
Property Insurance
Will my Business Insurance cover the company’s assets whilst temporarily removed to an employee’s home?
This will depend on the conditions of your property policy. Generally there is a clause included in most business package policies where cover is extended to property while it is temporarily removed from any Premises, but this is dependent on damage occurring, so most policies may not apply without specific changes.
General Property insurance can be considered, and/or an employees Home Contents insurance may respond.
We understand that many insurers are currently considering this position, and may look to amend the cover to include temporary working from home provisions.
Will my business assets be covered during transit – for example, whilst located in their vehicle?
Some policies will automatically cover this risk and in other cases you will need a ‘General Property’ or ‘Transit’ coverage. Generally motor insurance only provides a small benefit for items lost / damaged in a vehicle.
The property of the employee will not usually be covered by your business insurance, and any home and contents insurance the employee has in place will be unlikely to cover your business equipment.
Landlords Insurance
Am I covered if my tenant stops paying rent?
Landlords insurance has optional coverage for Loss of Rental and for Rent Default.
The Loss of Rental coverage applies after an insured event (damage), and in the event of a Tenant not paying rent relating to COVID-19 there is no insured event that has occurred, so the insurance protection does not respond.
Rent Default is an optional coverage and the risk of a tenant default is often mitigated by the engagement of a professional property manager / real estate firm. The real estate sector provide a valued service, and will be the first point of contact to help manage the process if a tenant stops paying rent.
The bond can often be claimed to meet some of the losses, and is deducted from any insurance considerations.
Insurance provisions generally require ‘all reasonable steps legally available’ to be taken under the relevant Tenancies Act in each state to recover the loss, with the insurance benefit following the outcome of the action to recover the loss.
Corporate Travel Insurance
Does my travel insurance respond to COVID-19 and having the cancel my trip?
Travel insurers have declared the COVID-19 outbreak as a ‘known event’ or no longer ‘unforeseen’. This means any travel booked after COVID-19 was deemed to have been a ‘known event’ will not be covered for COVID-19 related losses.
If you need to cancel a planned trip that was booked prior to COVID-19, you should first contact your travel agent or the airline (before submitting a claim) to seek a refund or make alternate travel arrangements based on existing tickets.
After this, the insurer will consider the difference as part of the claim.
Workers’ Compensation Insurance
Will my Workers Compensation policy provide cover for employees who have contracted the COVID-19 virus whilst at work?
A virus (like COVID-19) may be considered under the disease provisions of the Workers Compensation coverage. Injury generally includes disease, which means a disease that is contracted in the course of employment, but only if the employment was the main contributing factor to contracting the disease.
Compared to work-related injuries, it is more difficult to prove that a disease was contracted in, or caused by, particular employment. In the case of a virus such as COVID-19, establishing the time and place of contraction may become increasingly difficult without a direct outbreak and source at the workplace.
Will my Workers Compensation policy provide cover for employees whilst working from home?
While your employee may not be working on your premises, it is still your responsibility to provide a safe work environment. Therefore, if an employee sustains an injury in the course of their work while at home, it is likely the injury will be covered by your Workers Compensation policy.
We recommend carrying out a safety assessment, continue to check in with employees and review your work from home policies to ensure the policies in place are understood by all employees.
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