In the latest episode of Unsure? Insure! we talk about COVID-19 and business insurance.
I wasn’t going to publish this blog post because—at the risk of spoiling the contents of the article—there isn’t anything we can do with the products we arrange at With Jack in terms of the impact COVID-19 is having on businesses.
I spent most of last week answering customer emails and phone calls about Coronavirus and insurance, so I feel it’s best to go into a bit more detail. If anything, this episode can be a refresher on what the insurance you’ve arranged through With Jack can help you with.
Firstly, I completely understand your concern about business given how uncertain the economy is looking. Events are being cancelled, projects are being stalled… A lot of people are playing it safe.
I do wish there was more we could do for our customers. If you are struggling with work, please get in touch and we can help spread the word about your availability across our social media channels.
Am I insured against COVID-19?
When people ask if they’re insured against COVID-19, we can assume they’re asking one of two questions:
- If I fall ill or have to self-isolate, will my insurance cover my loss of earnings?
- If work is cancelled due to Coronavirus, will my insurance ensure I’m not out of pocket?
To answer the first question, the products we arrange wouldn’t cover loss of earnings if you fall ill. It is advised to do your own research into this because this isn’t With Jack's area, but income protection insurance might help if you can’t work due to illness.
The ABI have produced a useful guide on Coronavirus and insurance. They say that some income protection policies have short payment terms, therefore are designed to kick in with very little waiting period, and so are likely to cover people who are self-isolating and unable to work.
If you have income protection insurance you’ll want to look at your policy terms and speak to your insurer.
Moving onto the second question, your professional indemnity insurance does not cover loss of earnings from cancelled work.
Professional indemnity insurance would help you to defend yourself if a client threatened you or tried to recover damages from you in relation to your professional services. That could be a mistake you make in your work, or a client not being happy with the standard of work or your service.
These are obviously very general examples. If you want more information we recently recorded an episode called ‘professional indemnity teardown’ where we discuss the key features of a professional indemnity policy. Loss of income from cancelled projects is not one of them.
Professional indemnity insurance is for negligent acts. Let’s say you’re a photographer and decide to self-isolate despite being booked for weddings and events. This wouldn’t be seen as a negligent act because it isn’t part of the performance of your professional services.
Additionally, if you self-isolated and a customer sued you for breach of contract, this is unlikely to be covered because breach of contract needs to be unintentional to trigger the policy. If you self-isolated knowing that this would breach your contract then it’s not unintentional.
There is some loss of earnings cover with the legal expenses product, but it’s limited and is in relation to being called on jury duty.
- Make sure you have standard terms in your contract which would allow for cancellation due to sickness or illness (that would include any self-isolation or quarantine)
- A lot of freelancers have built up a network of fellow freelancers they can call on to fill in for them if they fall ill. Facebook groups, Slack channels or online communities are a good place to start
- Make sure you have a cancellation clause in your contract that outlines payment terms. This is especially important for photographers and film makers who are experiencing a big loss in immediate income due to events being cancelled last minute
Lots of people have been asking about whether business interruption insurance would cover them. This isn’t a product we offer on our website because most of our customers are freelancers who work from home or remotely and depend on minimal equipment to work. Business interruption insurance would cover loss of earnings if your premises or equipment was damaged due to an insured peril meaning you could no longer work.
For example, shop owners who experience a fire might be closed for months and lose out on income. Large agencies with multiple employees might experience an office flood and have to be relocated elsewhere at significant expense. This could increase their costs of working.
The ABI say that insurance for business interruption resulting from Covid-19 is likely to be rare. Standard business insurance policies are designed and priced to cover standard risks and are therefore unlikely to provide cover for the effects of a global pandemic.
I wish we had better news for you. Please get in touch if you want us to share your availability because now, more than ever, we all need to be looking out for one another. If you have legal expenses insurance you have access to a confidential counselling assistance helpline. If you’re feeling anxious and stressed, you might want to talk to a qualified counsellor. The number can be found on your insured schedule.