COVID-19: A focus on recovery
Even before mass gatherings were banned in the UK, many events were being postponed or cancelled to protect public health. Although responsible, this was further bad news for businesses who have not been able to recover their losses through insurance, due to COVID-19 not being declared a notifiable disease in England and Wales.
However, the Government has now followed the lead of both Scotland and Ireland, by agreeing that COVID-19 is classed as a notifiable disease. So, what exactly does this mean for business owners?
What is a notifiable disease?
Put simply, it means that GPs and medical professionals have a legal obligation to report all cases of COVID-19 to Public Health England.
What does this change for businesses?
The notifiable disease classification means that companies are now protected by existing business insurance policies for any losses they may suffer because of the virus.
Depending on the terms and conditions, this includes losses from any event cancellations. For example, those who were planning on attending MIPIM in March and are unable to go to the rescheduled June event, may now be able to claim.
The main insurance policy to focus on is business interruption cover. Uncommon risks, such as COVID-19, are not typically included in standard business insurance, so organisations must check the small print. If a firm does not have robust enough cover now, then it is unlikely to recover any current losses. As such, for businesses that don’t have this protection, it may be wise to purchase it as soon as possible if they can, should any further events be cancelled.
What about supplier agreements?
If suppliers aren’t delivering what they promised due to COVID-19, then it is vital to review all supplier agreements and clarify what each party’s obligations are.
Should a supplier not be meeting its contractual obligations, a ‘force majeure’ provision may need to be invoked if it is included in the agreement. This excuses one or both contracting parties from performing their obligations, as long as the disrupting event is beyond reasonable control, such as the current pandemic. However, the way the clause is worded is important, so this must be analysed carefully.
Ensuring all parties know the terms and conditions of contracts is also essential when it comes to refunds. If a supplier is refusing to refund a business, then certain contractual clauses can guarantee that losses are recovered when the money is due.
Hopefully, this level of disruption will be a once in a lifetime event. Nevertheless, it is important for businesses to learn from it, ensuring that they are prepared for any eventuality, whether it be assessing the insurance they hold or their supplier agreements.