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Coronavirus: Can business insurance help?

Some types of business insurance may be able to help with coronavirus-related claims

Updated

Fact checked
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Small businesses have been hit hard by the coronavirus (COVID-19) pandemic as non-essential businesses were forced to close during the Level 4 shutdown. Unfortunately, even the most robust business insurance policies aren’t offering much help.

If business has dropped due to COVID-19

Many businesses saw a huge drop in custom due to the national lockdown, restrictions on travel and several other sweeping containment efforts. Insurance is not likely to be much use here if you can still operate to some capacity.

However, there are other ways you can seek financial help. These include tax deductions, unsecured loans and even cash payments for businesses that keep paying staff. Make sure to check out what the Government is doing to help businesses affected by Covid-19.

If you have to close due to government guidelines

On 26 March, the government announced all non-essential services must close, including restaurants, pubs and cinemas. It was a huge blow to thousands of business owners and, sadly, it’s unlikely insurance will be much help.

While many business insurance policies include some cover for infectious diseases and government-mandated shutdowns, all of the policies Finder analysed excluded “quarantinable diseases” or “biosecurity emergencies” – categories that coronavirus (COVID-19) falls into.

What if your staff get sick?

If your business isn’t too badly impacted by the restrictions, you may have a fighting chance of making it through the next few months. Unfortunately, you also have to keep in mind that some of your staff may be out sick in the coming months.

Will cyber insurance help?

Cyber insurance has never been more important for businesses, as employees working from home can easily weaken online security.
Thankfully, most cyber insurance policies include cover for security breaches that happen while employees are working remotely. Of course, you have to meet the requirements laid out in your policy, but your business should still be covered in the event of a breach.

If you don’t have cyber insurance yet, you can still obtain it. Insurance companies can even help you strengthen your defences, so your business is less vulnerable to attacks.

What about trade credit insurance?

Trade credit insurance is another type of cover that is likely to pay out in relation to the coronavirus. If a key client can’t pay their outstanding debt, which may very well happen in these increasingly uncertain times, trade credit insurance covers some of their unpaid bills.

If you don’t have trade credit insurance, policies are still available. However, it’s likely pricing will reflect the turbulent times and may be unaffordable at this point.

Picture: GettyImages

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