There is concern around businesses and whether they might not have adequate cover amid the coronavirus outbreak.
What do business interruption policies stipulate in regard to protection in disruptions of this nature?
Webber Wentzel partner for insurance Raynold Tlhavani says some business interruption policies require that there be damage to insured property to trigger the business interruption section of a policy.
Business interruption insurance would cover you for financial losses arising from the disruption of your business. Business interruption is generally sold as part of a more extensive insurance policy... most business interruption policies require that there must be damage to property insured under a particular policy before the business interruption section of the policy will kick in.— Raynold Tlhavani, Partner for insurance - Webber Wentzel
Due to the nature of coronavirus, it is an airborne disease and it is unlikely to cause any damage to property and because of that most people might find they are not covered.— Raynold Tlhavani, Partner for insurance - Webber Wentzel
It doesn't necessarily have to be property in the form of a house or office premises, it can just be property that you use in your tool of trade.— Raynold Tlhavani, Partner for insurance - Webber Wentzel
He says some insurance policies have provisions for infectious or contagious diseases but most are not aware of this.
Even for that extension, the extension has a radius limit of kilometres....— Raynold Tlhavani, Partner for insurance - Webber Wentzel
The unfortunate thing is that this is not new territory because outbreaks have happened before but for most small businesses they would not have been aware of the need to take out this kind of insurance and that is unfortunate.— Raynold Tlhavani, Partner for insurance - Webber Wentzel
Insurance, like all other businesses, is something that evolves every day, so in the future you are more likely to see cover of this nature. Even if it is not available people will be asking for this kind of cover because they have seen what the impact of something like coronavirus is if you do not have the cover.— Raynold Tlhavani, Partner for insurance - Webber Wentzel
Click on the link below to hear more...