March 19, 2020 2.29 pm This story is over 44 months old

Call for insurers to back Lincolnshire’s businesses amid Coronavirus crisis

“There will be a lot of businesses who go to the wall”

Businesses across Lincolnshire are navigating insurance claims in the face of Coronavirus as some warn that companies could “go to the wall”.

As the virus spreads across the county, businesses are looking to insurers to protect against a loss of income and potential closure.

Rishi Sunak, chancellor of the exchequer, announced a £330 billion stimulus earlier this week, which includes loans to protect companies against the virus.

However, companies have said insurers are avoiding paying out on business interruption insurance because COVID-19 is a “novel virus” and is not covered within their policy.

You can follow live updates on Coronavirus from around Lincoln and Lincolnshire in our live blog.

Hardy’s Animal Farm, Ingoldmells, has been in business since 1997. Stewart Hardy said r. Photo: Hardy’s Animal Farm.

Stewart Hardy, who runs Hardy’s Animal Farm in Ingoldmells, warned that failure to help would lead to some companies going under.

“There will be a lot of businesses who go to the wall,” he said.

“If they do not go under, they will take on a debt burden which makes growth difficult.

“But, I think generally the government have done a good job in difficult circumstances.”

He added it was “very likely” that the farm may have to close but should be able to see the virus through.

The outbreak of Coronavirus has already seen a number of businesses close their doors.

Butlin’s and Fantasy Island in Skegness have announced temporary closures.

Both locations are expected to remain shut until after the Easter period, in response to the guidelines set out by Prime Minister Boris Johnson.

Councillor Colin Davie, executive member for economy and place at Lincolnshire County Council, said insurers need to do more to protect business.

Councillor Colin Davie, executive councillor for economy and place at Lincolnshire County Council. Picture: Calvin Robinson for Lincolnshire Reporter

“This is a global emergency and everybody needs to step up to the plate,” he said.

“It is clear to me that insurance companies are doing all they can to avoid paying out on policies that businesses took out to protect themselves from this type of eventuality.

“If they want to avoid being targeted then they need to rethink their actions.”

A spokesperson for the Association of British Insurers said: “The spread of Coronavirus is unprecedented in modern times and we understand this is an incredibly difficult time for families and businesses.

“Standard commercial insurance policies – the type the vast majority of businesses purchase – provide cover against a wide range of day to day risks including damage caused by fire, flood, theft and accidents involving employees.

“Insurers pay out £22 million each day to firms through these policies, supporting millions of businesses across the UK each year.

“Only a very small minority of businesses choose to buy any form of cover that includes local closure due to an infectious disease.

Rishi Sunak, Chancellor of the Exchequer. Picture: Ministry for housing, Communities and Local Government.

“An even smaller number will have cover enabling them to potentially claim on their insurance for the presence or impact of the Coronavirus pandemic.  The Government’s clarification yesterday will help some of these policyholders claim if the other terms and conditions of the policy are met.

“We strongly recommend that every business should check with their insurer or broker if they wish to confirm the type of cover that they have purchased.”

As part of plans to help the economy, Mr Sunak introduced a stimulus package earlier this week.

It includes a Coronavirus business interruption scheme, which will be provided as a loan by the British Business Bank through participating providers.

The government is expected to roll out the scheme to businesses on March 23.

Companies will also be helped through business rate relief, as well as other small business grants.

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