Following the global outbreak of the disease COVID-19 (caused by a new type of Coronavirus), Kingsbridge have engaged with a range of insurers in order to obtain clarification as to whether commercial insurance policies will respond to losses that may be incurred.
There are two potential areas of cover that may be triggered by losses sustained.
Business Interruption – Notifiable Diseases & Denial of Access Extensions
Business Interruption provides cover for financial losses due to an interruption to business caused by Material Damage to physical property, for example fire or flood causing damage to buildings or equipment. COVID-19 does not involve any Material Damage to property and so is usually excluded from Business Interruption losses.
Certain insurers provide extensions to Business Interruption cover, two of which are Denial of Access or Infection Diseases. The vast majority of insurer wordings Kingsbridge have analysed restrict these extensions by listing Notifiable Diseases – a range of current, known diseases which will trigger cover. COVID-19 is not currently listed on any insurers’ wordings. The UK Government has now confirmed COVID-19 as being a notifiable disease, however unless there a major shift within the industry (or Government intervention), insurers will not be looking to add this new disease to their list, particularly mid-term.
The Association of British Insurers (ABI) has backed this market-wide position, stating that standard Business Interruption policies are ‘designed and priced to cover standard risks, not those that are very unlikely, such as the effects of COVID-19.’
Personal and Business insurance policies will provide cover for cancellation of travel based upon the guidance of the Foreign & Commonwealth Office (FCO). In the event that a particular country or region has been deemed unsafe to travel to by the FCO, cancellation cover may apply. In addition, if travel arrangements are cancelled by an operator / airline, insurers will consider claims.
For anyone that has travelled and suffered with the effects of the disease whilst abroad, their medical cover should provide the necessary protection for hospitalisation / treatment / repatriation costs.
Your liability insurance covers working from home.
Your legal responsibilities from a healthy and safety perspective are not altogether different in respect of a homeworker as they are for an office worker. Risk assessments should be carried out and you need to be mindful that you are responsible for the safety of the equipment you supply. Responsibility for providing honest and accurate information however lies with the employee along with fulfilling any agreed actions. In addition, you need to consider how regular contact will be maintained with each employee from a supervision and welfare perspective, and also be mindful of the fact that where applicable you, as an employer, will still need to comply with the Working Time Directive.
These are exceptional times and as such, there will be no reasonable expectation of your health and safety officer to visit the home of every employee who you ask to work from home. A reasonable solution would be the completion of a standard questionnaire by each member of staff or some form of online assessment.
It would be an unusual scenario where it would be necessary or appropriate in the current environment for a member of your team to physically meet with a third party in their own home so the public liability risk would seem slim to non-existent, but clearly if this is not the case then the welfare and safety of that same third party requires consideration.
The other primary consideration is compliance with GDPR and general data and privacy protection. Employees need to be reminded that their personal obligations extend beyond the walls of their regular place of work, and simple measures like remembering to lock the screen on their laptops, securely filing or locking away paperwork, etc need to be maintained. Your IT team no doubt will have considered the use of VPNs, password protected access to systems, cloud security and general standards of encryption. It is particularly important to maintain cyber security resilience given that a significant number of cyber / data protection claims arise from unsecured VPNs.
Each homeworker should check their own home insurance that working from home does not invalidate their own insurance policy (very unlikely unless they are going to have third parties visiting or are undertaking manual work).
Portable Computer Equipment
Your current Office / Commercial Combined policy may already contain ‘All Risks Cover’ for portable computer equipment used away from the office. If this is not the case, or if there is likely to be a significant change in the sum insured (i.e. you are going to buy a large amount of new laptops) then please advise your broker of the same so we can advise insurers.
Directors & Officers
Senior Management within all industries should focus on ensuring continued regulatory compliance and employee protection. Potential claims could arise from allegations of insufficiency of Business Continuity Plans, or alternatively from unsatisfactory management decisions. Communication to staff should be clear and coherent, as well as being predicated on current Governmental advice.