The Association of British Insurers (ABI) has said that most companies will not be covered for the costs of business closure due to coronavirus, regardless of what the Government says, in a chilling warning to thousands of firms today.
Pub and restaurant owners have claimed that the only reason the Government did not order a widespread closure on Monday was because doing so would trigger thousands of insurance payouts.
However, the ABI, which represents the industry, said that the vast majority of British businesses will not have purchased cover that "will enable them to claim on their insurance to compensate for their business being closed by the coronavirus".
An ABI spokesperson said: "Standard business interruption cover – the type the majority of businesses purchase - does not include forced closure by authorities as it is intended to respond to physical damage at the property which results in the business being unable to continue to trade.
"A small minority of typically larger firms might have purchased an extension to their cover for closure due to any infectious disease. In this instance an enforced closure could help them make the claim, but this will depend on the precise nature of the cover they have purchased."
On Monday, Boris Johnson issued a stark warning to the public, urging people to avoid all social contact where possible.
Johnson said: "We need people to start working from home where they possibly can and you should avoid pubs, clubs, theatres and other such social venues."
The PM also said that from Tuesday, the Government was removing support from emergency services for large scale gatherings.
Experts later accused the Government of protecting insurers by not enforcing compulsory closures.
The British Beer and Pub Association called for the Government to cancel all business rates payments for six months, as well as all tax payments including PAYE, VAT and corporation tax for pubs and hospitality businesses.
It also called for the cancellation of beer duty payments for six months, and the postponement of the planned national minimum and living wage increases due in April.
British Beer and Pub Association chief executive Emma McClarkin said: "I cannot emphasise strongly enough how critical it is that action is taken now.
"Failure to do so will destroy the industry."
