‘Specified Disease’ or ‘Notifiable Disease’?

We have recently seen growing media coverage surrounding the declinature of business interruption claims and possible challenges to compel the insurance industry to meet such claims.

In response we just wanted to reiterate that in the majority of cases, ‘Notifiable Diseases’ not specified on a business insurance policy are usually excluded and therefore will not trigger cover - including forced closure. This unfortunately would include COVID-19 which is a new and unknown disease and, therefore, would not be specified on any insurance policy.

There are a minority of insurance products that will provide coverage for ‘Infectious Diseases’ which are not specified but must be ‘Notifiable’. We are, however, also seeing insurers reject claims on this cover basis, advising that cover was not intended to trigger for “pandemics”, but were included to cover isolated outbreaks of infectious diseases either AT the business premises, or within the vicinity – which directly caused the business closure. We suspect that there may be some legal challenges under these wordings where there is more potential for ambiguity; however, in the majority of circumstances, where cover only applies on a ‘specified basis’, there is little prospect of insurers reversing their decision. In our opinion, despite any frustration on the part of the Government an insurer is unlikely to honour a claim which is not covered under the policy wording.

As mentioned, we are monitoring the Government advice and should they introduce legislation to compel the insurance industry to honour claims in any way then we will provide further updates.