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Business: Insurance

Question for Treasury

UIN 33489, tabled on 23 March 2020

To ask the Chancellor of the Exchequer, if he will make it his policy to require insurance companies to define covid-19 as a notifiable disease for the purposes of claims made by businesses affected by the Government’s order to close; and if he will make a statement.

Answered on

31 March 2020

The Government is in continual dialogue with the insurance sector about its contribution to handling this unprecedented situation.

For those businesses which have an appropriate policy that covers government ordered closure and unspecified notifiable diseases, the Government’s social distancing instructions are sufficient to allow businesses to make a claim against their insurance, provided the other terms and conditions in their policy are met.

The FCA’s rules require insurers to handle claims fairly and promptly; provide reasonable guidance to help a policyholder make a claim, and appropriate information on its progress; not reject a claim unreasonably; and settle claims promptly once settlement terms are agreed.

However, it is important to note that most businesses have not purchased insurance that covers losses from unspecified notifiable diseases, such as COVID-19. Some policies cover losses arising from any disease classed as notifiable by the government, however most policies only cover a specific list of notifiable diseases.

The Government recognises that businesses who do not have appropriate insurance cover will require support from elsewhere. As such, businesses should explore the full package of support set out by the Chancellor in the Budget, on 17 March, and on 20 March, which includes measures such as business rates holidays, the Coronavirus Business Interruption Loan Scheme, and wage support.

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