Will your insurance cover your practice for the COVID-19 outbreak?

will business insurance cover a dental practice during COVID-19?If you’re wondering whether you can claim on your insurance for business interruption amid the COVID-19 outbreak, a professional review of your policy wording is a vital first step. Phil Morgan explains. 

When it comes to business insurance, the COVID-19 pandemic has left many dental practice owners in a difficult situation. Dentistry is one of the hardest hit industries during the current coronavirus outbreak. With practices forced to shut down services and close up shop indefinitely. In many cases, income has come to a complete halt.

Many business insurance policies include cover for business interruption. This should, in theory, help you reclaim and minimise any financial losses suffered due to an interruption in business. However, with many industries now having to suspend services for the foreseeable future, insurance providers are exceptionally reluctant to accept liability for business interruption as a result of the virus.

Insurers seem to take their time in reaching a decision for business interruption claims relating to the pandemic.

This could be because they are simply overwhelmed with claims right now. But it’s more likely because they know that the decisions they make will affect a large number of businesses. From the many policies we review, we notice new and unexpected developments that all business owners need to be aware of.

What dental practice owners need to know

If your practice is covered for business interruption, you may be eligible to make an insurance claim. However, it will depend entirely on the wording of your policy and, in particular, any exclusions that apply. 

During these unprecedented times, it is likely that insurers will find every possible reason to reject a claim. It’s still unclear how everything will play out. We’ve seen insurers find many ways to repudiate claims based on policy wording or clauses. Especially those regarding diseases.

For example, even though COVID-19 is now formally classified as a notifiable human disease, your policy may exclude diseases that are not specified within the policy itself. Since COVID-19 was unknown when writing these policies, this would probably lead to a rejection of your claim.

For policies that do cover unspecified diseases, the cover may only be valid when the disease occurs at the premises. In this case, you may need evidence that a case has occurred on-site. Something which could be difficult to prove without any testing. If you have cover for an on-site occurrence, some insurers may only pay for any losses you incur before the wider government shut-down came into force.

In other cases, the government’s widespread closure of businesses may make a claim invalid if the policy states that the business has to force to close after an occurrence at the premises. Some insurers we have spoken with have said this may not trigger the business interruption clause, leaving many practices without any cover at all.

Phil Morgan is chairman and co-founder of Morgan Clark Loss Assessors.

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