Has Sunak just trashed insurers?

[Wizard]

If I heard him correctly Sunak has just said he does not care what the ABI says the Govt. advise constituents a business interuption event that is covered by insurance policies. Is that what he said? If so I would expect insurerance company shares to collapse tomorrow morning.

[heathmount]

That's what I heard although only for places that actually have insurance that covers pandemics. From what I heard earlier today I'm not sure everyone does. So a hit yes, but hopefully not a Marstons-esque one.

[Wizard]

That's what I heard although only for places that actually have insurance that covers pandemics. From what I heard earlier today I'm not sure everyone does. So a hit yes, but hopefully not a Marstons-esque one.

Agreed a lot will not be insured, but I believe a lot have business interuption cover. What the ABI seemed to be saying earlier was that COVID-19 was Force Majeure and so excluded from those policies, they were saying you were only covered if a very rare form of more specific insurance had been taken out. Sunak seemed to be saying that all business interuption policies would cover COVID-19 even in the current situation, i.e. where business chose to close rather than being forced to do so.

[Wizard]

OK, maybe slight of hand here. They seemed to clarify later that all that they have agreed with insurers is if the policy covers pandemics the current government guidance constituets a trigger event. But my understanding earlier is that many business interuptions do not include coverage for pandemics and based on the clarification those businesses are still stuffed.

[heathmount]

Yeah that's how I read it. The only light for those businesses that can't claim is access to the 330B although I'm in no position to know whether that's of any comfort. I hope for some at least it's enough.

[dspp]

If I heard him correctly Sunak has just said he does not care what the ABI says the Govt. advise constituents a business interuption event that is covered by insurance policies. Is that what he said? If so I would expect insurerance company shares to collapse tomorrow morning.

Moderator Message:
Nothing to do with HYP-P. If you are suggesting shorting insurers then it may as well be a Share Idea. This relocation is as a result of alerts from aggrieved HYPers. And no debate here about Moderation decisions thank you, go to Room 101 for that. dspp

[monabri]

Note the date..4th March

https://www.bbc.co.uk/news/business-51730412

"The government has bowed to pressure and changed its stance on insurance to cover firms for coronavirus losses in England."

"The government said it would declare coronavirus as a "notifiable disease", a formal classification required by many insurance policies. Businesses had warned that expected coronavirus losses risked not being covered under existing rules.Other regions of the UK have already made the change."


The Guardian (March 17)
https://www.theguardian.com/world/2020/ ... e-policies

"Most coronavirus-hit UK firms not protected by their insurance policies"


The BBC (March 17)

https://www.bbc.co.uk/news/business-51927500

"Coronavirus: No insurance cover for most virus-hit businesses"

‐------------------‐--------------------------------------------------------------------

Some thoughts..not necessarily correct but I'm sure others can chip in and correct them.

Legal & General....don't think they do business insurance ( ditto Admiral).

Aviva & Direct Line ( "NIG") have parts of their business that do business insurance.

However, not to say that all will be treated with a broad brush if there is an issue as suggested.

[dspp]

Note the date..4th March

https://www.bbc.co.uk/news/business-51730412

"The government has bowed to pressure and changed its stance on insurance to cover firms for coronavirus losses in England."

"The government said it would declare coronavirus as a "notifiable disease", a formal classification required by many insurance policies. Businesses had warned that expected coronavirus losses risked not being covered under existing rules.Other regions of the UK have already made the change."


The Guardian (March 17)
https://www.theguardian.com/world/2020/ ... e-policies

"Most coronavirus-hit UK firms not protected by their insurance policies"


The BBC (March 17)

https://www.bbc.co.uk/news/business-51927500

"Coronavirus: No insurance cover for most virus-hit businesses"

‐------------------‐--------------------------------------------------------------------

Some thoughts..not necessarily correct but I'm sure others can chip in and correct them.

Legal & General....don't think they do business insurance ( ditto Admiral).

Aviva & Direct Line ( "NIG") have parts of their business that do business insurance.

However, not to say that all will be treated with a broad brush if there is an issue as suggested.

Zurich do it, I know because we have it. The specific section is a Business Interruption policy 'extension' for "Notifiable diseases, vermin, defective sanitary arrangements, murder and suicide". Nonetheless I rather expect the small print will be exceedingly fine.

regards, dspp

[monabri]

Surprisingly, LGEN went as low as 158.8p....

[Dod101]

Legal & General sold (or are in the process of selling) their non life insurance recently. Admiral only do cars and Household insurance. Direct LIne? I do not know but I do not think they do business insurance. Aviva and RSA both do business insurance. Sunak cannot just trash insurers but he can I suppose make Coronavirus a notifiable disease. Whether that makes insurers liable will depend on the wording of individual policies.

Dod

[dspp]

Zurich do it, I know because we have it. The specific section is a Business Interruption policy 'extension' for "Notifiable diseases, vermin, defective sanitary arrangements, murder and suicide". Nonetheless I rather expect the small print will be exceedingly fine.

regards, dspp

Now there is a surprise, the insurers are wriggling .......

"Although there is an infectious diseases extension on the business interruption , this would only apply if there was infection at your premises. There is also an exclusion in the policy wording for a pandemic declared by the World Health Organisation."

As usual the politicians are a long way away from the business reality. Apparently a notifiable disease is covered, provided the WHO has not taken an interest.

dspp

[monabri]

Legal & General sold (or are in the process of selling) their non life insurance recently. Admiral only do cars and Household insurance. Direct LIne? I do not know but I do not think they do business insurance. Aviva and RSA both do business insurance. Sunak cannot just trash insurers but he can I suppose make Coronavirus a notifiable disease. Whether that makes insurers liable will depend on the wording of individual policies.

Dod

Direct Line own NIG who do business insurance.

[Howard]

Zurich do it, I know because we have it. The specific section is a Business Interruption policy 'extension' for "Notifiable diseases, vermin, defective sanitary arrangements, murder and suicide". Nonetheless I rather expect the small print will be exceedingly fine.

regards, dspp

Now there is a surprise, the insurers are wriggling .......

"Although there is an infectious diseases extension on the business interruption , this would only apply if there was infection at your premises. There is also an exclusion in the policy wording for a pandemic declared by the World Health Organisation."

As usual the politicians are a long way away from the business reality. Apparently a notifiable disease is covered, provided the WHO has not taken an interest.

dspp

Insurance brings out an interesting human trait. (Not you dspp ).

I heard it on Radio 4 today.

Caller A "You can't trust those insurers they have fine print."

radio host "Well, are you covered by your insurance?"

Caller A "Dunno, it was cheap and I couldn't be bothered to read the policy until after I wanted to claim." (I paraphrase )

regards

Howard

[ADrunkenMarcus]

Insurance brings out an interesting human trait. (Not you dspp ).

I worked briefly for an insurance firm. One customer rang up because she wished to cancel her annual policy and get a full refund, on the grounds she had not used it that year or made a claim. However, the 12 months was almost up so no refund was due (cancellations could be processed up to, I think, nine months in but refunds were then on a pro-rata basis of time lapsed).

I struggled to explain to her that the premium she had paid went part way to funding other customers who had made claims.

Best wishes

Mark.

[Dod101]

Zurich do it, I know because we have it. The specific section is a Business Interruption policy 'extension' for "Notifiable diseases, vermin, defective sanitary arrangements, murder and suicide". Nonetheless I rather expect the small print will be exceedingly fine.

regards, dspp

Now there is a surprise, the insurers are wriggling .......

"Although there is an infectious diseases extension on the business interruption , this would only apply if there was infection at your premises. There is also an exclusion in the policy wording for a pandemic declared by the World Health Organisation."

As usual the politicians are a long way away from the business reality. Apparently a notifiable disease is covered, provided the WHO has not taken an interest.

dspp

The insurers are not wriggling. An insurance policy is a (usually written) contract between the insurer and the insured and just like any other contract it has terms and conditions which apply to that contract. If the clause is as quoted by dspp, then that is what applies. Very few brokers and almost certainly no insured would ever think about an infectious diseases clause as being in the least relevant unless maybe if you were running a hotel until of course a worldwide epidemic shows up on the horizon and then maybe one or two might reach for the policy wording.

Dod

[dspp]

Zurich do it, I know because we have it. The specific section is a Business Interruption policy 'extension' for "Notifiable diseases, vermin, defective sanitary arrangements, murder and suicide". Nonetheless I rather expect the small print will be exceedingly fine.

regards, dspp

Now there is a surprise, the insurers are wriggling .......

"Although there is an infectious diseases extension on the business interruption , this would only apply if there was infection at your premises. There is also an exclusion in the policy wording for a pandemic declared by the World Health Organisation."

As usual the politicians are a long way away from the business reality. Apparently a notifiable disease is covered, provided the WHO has not taken an interest.

dspp

The insurers are not wriggling. An insurance policy is a (usually written) contract between the insurer and the insured and just like any other contract it has terms and conditions which apply to that contract. If the clause is as quoted by dspp, then that is what applies. Very few brokers and almost certainly no insured would ever think about an infectious diseases clause as being in the least relevant unless maybe if you were running a hotel until of course a worldwide epidemic shows up on the horizon and then maybe one or two might reach for the policy wording.

Dod

Dod,

I can assure you they are wriggling. Their phone calls with me would make Sir Humphrey blush.

The insurance industry is confident (their words) that not a single business in the UK will be covered.

One day they too will want a bail out. I am sure you can predict my opinion when that day comes.

Meanwhile my job is to run my business, seemingly without their support. That's life.

regards,
dspp

[Dod101]

Technically these days most insurance company employees are not very good. A bit like bankers. In the old days like when I were a lad, we had to study home correspondence courses starting off with the Lloyds coffee houses and the theory of insurance. They should certainly be able to refer you immediately to the clause in your business interruption policy to clarify what is and what is not covered. There should also be (and probably is somewhere) a directive from the insurers top management about how to proceed because in this sort of situation if one insurer accepts liability, correctly or otherwise, it tends to open the floodgates. I doubt that there will have been an event like this before with such possible far reaching consequences which is why it needs something like 'unless it is declared a pandemic by the WHO.' Even then you need to prove that your business has been directly affected by that event and not some other event which just happens to coincide with the pandemic. It is easy if you have a fire on your premises but much harder with such a nebulous event as this. It is easy for you to see the effect but that is not the point. Bear in mind that you will not be the only one in this situation. Have you discussed this with your broker? That is the way to go not with the insurer and if your broker is telling you that insurers are wriggling, are you sure it is not your broker?

Business interruption insurance was never very well understood in my day by the average clerk and for this sort of event it will probably need intervention at the highest level and it will take time for a decision to be reached.

I am not particularly defending insurers but trying to steer a middle course. Most insurers do not wriggle and in any case have you never heard of fiddling of insurance claims by the public? That is the other side of the coin. People think that insurers have a bottomless pit of money.

Dod

[dspp]

Technically these days most insurance company employees are not very good. A bit like bankers. In the old days like when I were a lad, we had to study home correspondence courses starting off with the Lloyds coffee houses and the theory of insurance. They should certainly be able to refer you immediately to the clause in your business interruption policy to clarify what is and what is not covered. There should also be (and probably is somewhere) a directive from the insurers top management about how to proceed because in this sort of situation if one insurer accepts liability, correctly or otherwise, it tends to open the floodgates. I doubt that there will have been an event like this before with such possible far reaching consequences which is why it needs something like 'unless it is declared a pandemic by the WHO.' Even then you need to prove that your business has been directly affected by that event and not some other event which just happens to coincide with the pandemic. It is easy if you have a fire on your premises but much harder with such a nebulous event as this. It is easy for you to see the effect but that is not the point. Bear in mind that you will not be the only one in this situation. Have you discussed this with your broker? That is the way to go not with the insurer and if your broker is telling you that insurers are wriggling, are you sure it is not your broker?

Business interruption insurance was never very well understood in my day by the average clerk and for this sort of event it will probably need intervention at the highest level and it will take time for a decision to be reached.

I am not particularly defending insurers but trying to steer a middle course. Most insurers do not wriggle and in any case have you never heard of fiddling of insurance claims by the public? That is the other side of the coin. People think that insurers have a bottomless pit of money.

Dod

Dod,

Yes I am in communication with our broker. Yes to senior people. Yes I understand all your points and am used to human nature. No it took very little time for a decision : by now they have the teflon phrases off pat.

I can see the wording in the policy. Indeed it does exclude WHO pandemics. Actually it includes almost nothing.

Personally I am not at all surprised. As I reached to check our insurance a while back I predicted that it would not pay out. I commented as much in advance here.

What has become apparent is that the "notifiable diseases" extension was not intended to be useful to businesses such as ours - quite how an empty steel building with steel machinery in it might get closed down by a local authority plague inspector is beyond me. That cover extension is really intended for food & accomodation & similar venues. Quite why the broker advised & sold that extension to us is interesting. However it is not something I shall lose sleep over.

The reality is I expect my insurer and my broker to both work together in finding a way not to pay out on any claim. I'm afraid that is a view I have formed over years of dealing with the whole industry. As a result the sensible course of action would be to use legal minimum cover from cheapskate & sons r us. Why go with the topline pukka merchants why they are just as slippery ? (we do, but we ask ourselves why)

Like I say, my main focus is keeping our people employed. The reason I am taking the time to explain my experiences in this respect is that, given that I am one of the better insured businesses, then - as my insurer says : no one will be covered. Irrespective of what government says. And it is best that this understanding gets out.

regards, dspp

[Dod101]

Well dspp, that was probably the idea, that you should not be covered for this event unless you specifically asked for it and even then the insurer might have declined to cover it.. No insurance policy is an 'all risks' policy. Even what used to be (erroneously) called Contractors' All Risks had many exclusions in it. I wish you well and hope that you get some satisfaction but even if the losses from this virus are eventually accepted, your problems are only starting because you will then have the fun (not) of proving your losses. It is one of the more difficult (and misunderstood) forms of insurance. Much better to have a fire I am afraid.

I wish you luck and can quite see that it must be incredibly frustrating for any business affected by this. Come to think of it, I live off my dividends and my only other income is the State pension, come on Sunak where's my money? LIfe sadly is not like that.

Dod

[Dod101]

Looking back at this exchange, there is no need for insurers to wriggle if they have an exclusion on the policy to say that if there is a pandemic declared as such by the WHO you do not have ay cover for its effects. That is a fact and I would be willing to bet that had you read your policy when it was issued (as I expect you would have been encouraged to do) you would have glossed over it as its being so unlikely.............

Insurers are not crooks or wriggle merchants and these days the public has a lot of protection via ombudsmen and so on that Insurers cannot afford to get it wrong. I am not making light of your losses but losses from a pandemic are unquantifiable and that is one reason why insurers will not cover them. It is a public p0olicy matter and that is why our Chancellor is offering the help he is.

Dod