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Coronavirus: Can business insurance help?

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

Updated

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Small businesses are being hit hard by the coronavirus (COVID-19) pandemic as customers stay at home, staff get sick and the government forces closures. Unfortunately, even the most robust business insurance policies aren't offering much help.

Alert: If your business is suffering hardship as a result of COVID-19, you might be able to access relief from your insurer, including deferred premiums or refunds.

If business has dropped due to COVID-19

Many businesses have already seen a huge drop in custom due to social-distancing guidelines, restrictions on travel and several other sweeping containment efforts. Unfortunately, if your business is open but customers aren't coming, it's unlikely insurance will be able to help.

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.

If you have to close due to government guidelines

On 22 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.

InsurerPolicyCovered?What the PDS says
AAMIBusiness insurance policy
Excludes highly pathogenic Avian influenza, or any listed human disease, biosecurity emergency or human biosecurity emergency defined in or declared under the Biosecurity Act
AIGMy business pack
There is no cover where the closure or evacuation is caused by the outbreak of highly pathogenic Avian Influenza in humans or any other disease declared to be a quarantinable disease under the Quarantine Act.
AllianzSmall business advantage pack
There is no cover due to highly pathogenic Avian Influenza in humans or any other disease declared to be a quarantinable disease under the Quarantine Act
BerkleyCommercial business package
There is no cover for highly pathogenic Avian Influenza or any disease declared to be a quarantinable disease under the Quarantine Act
CGUSmall business insurance
Cover doesn't apply to highly pathogenic Avian Influenza in humans, or any other diseases declared to be quarantinable diseases under the Quarantine Act
ChubbBusiness pack
Does not include cover for the occurrence of any prescribed infectious or contagious diseases to which the Quarantine Act applies
NRMABusiness insurance
Will not cover interruption or interference to the business in respect of highly pathogenic Avian Influenza in humans or any other diseases declared to be quarantinable under the Quarantine Act
QBEBusiness pack
No cover for highly pathogenic Avian Influenza or any disease declared to be a quarantinable disease under the Quarantine Act
VeroBusiness insurance
No cover for highly pathogenic Avian Influenza or any biosecurity emergency or human biosecurity emergency declared under the Biosecurity Act

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 many of your staff may be out sick in the coming months.

In some cases, workers' compensation may be able to help. According to the Australian government, the coronavirus may be covered by workers' compensation if the employee can prove they caught the disease largely because of their job.

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'll 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 get 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 will cover some of their unpaid bill.

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.

How are insurers helping?

If your business is suffering hardship as a result of COVID-19, you might be able to access relief from your insurer, as part of a package announced by the Australian Competition and Consumer Commission (ACCC) on 2 April.

There are a range of measures available in the package, including the opportunity for eligible businesses to defer their insurance premiums for up to six months, without losing coverage.

Some businesses will also be able to claim refunds for unused premiums on any insurance policy they need to cancel as a result of the pandemic. Businesses will not be charged administration or cancellation fees to do so.

So far, the package applies to Suncorp, Allianz, and QBE Insurance customers, but the ACCC has welcomed other insurers and brokers to participate - as long as they notify the ACCC.

Other quick ways to save money

Are you worried about your finances during this time? Don't forget to review your bills - spending a little time on admin, could save you over the weeks and months to come.

Here are some guides on how to save some money on your daily expenses. There are plenty of things you could do, from checking your energy rates, switching to a low-interest credit card, or simply dropping parts of your insurance that you don't need.

Picture: GettyImages

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