Many local organisations could face substantial financial losses as a result of the coronavirus situation.
There are 3 things you should do:
- Alert the funder to the situation. They may not be able to react swiftly or at all but if all grantees alert them to the issues then funders can work together to address the situation.
- Check your insurance policy. If you have business continuity insurance there is a chance that some of your losses may be covered (see below for more details).
- Keep an eye on sources of sector news for national and local answers. Central government has already put a range of measures in place for small businesses and sector leaders are lobbying for those to be extended to charities.
You may have business continuity insurance in place and this will often include cover for loss of rental income. However, it generally doesn’t include cover as standard to provide for business interruption for notifiable diseases.
Even if you have the notifiable diseases cover in place you may find your insurer refusing to accept COVID-19 as it was not on the list of notifiable diseases when the insurance was taken out.
“Commercial insurance policies provide cover against a wide range of risks, that can be tailored to the needs of individual businesses, including extensions to cover. Businesses who are concerned about the impacts of Covid-19 should check the scope of their cover, and speak to their insurance adviser or broker. A small number of businesses may have cover in place that will specifically provide for business interruption arising from notifiable diseases. However, this type of extension is not commonly included as standard. Standard business insurance policies are designed and priced to cover standard risks and are therefore unlikely to provide cover for the effects of global pandemics like Covid-19." ABI 4/3/20
However, as of 1700 on 5 Mar 2020, emergency legislation reclassified COVID-19 as a notifiable disease so the recommendation is to go back to your insurers with this additional information. https://www.gov.uk/government/news/coronavirus-covid-19-listed-as-a-notifiable-disease
Charities are known to have run into the issue with Zurich and Aviva policies.
NCVO, NAVCA and other nationals are trying to lobby the government and ABI to resolve it.