Gillian Martin MSP has called on insurance companies to offer greater protection to businesses following the outbreak of Covid-19.
This comes as the UK’s umbrella organisation for insurers has warned that most existing insurance policies will not cover businesses in the event of closure because of Coronavirus.
The Association of British Insurers- representing over 200 insurance and long term savings companies in the UK- has told businesses that Covid-19 is not included in most standard or business interruption policies and has advised them to consider seeking further cover elsewhere.
The move comes as small-business owners including Flowerpots Nursery based in Turriff and Kingseat have been advised that they cannot make an insurance claim for coronavirus losses.
Managing Director of Flowerpots, Alison King, discovered that Poundgates, who are the national insurance partner of the National Day Nursery Association (NDNA), would not be amending their business interruption policies to cover COVID-19.
Despite moves earlier this month from the UK Government declaring Coronavirus as a “notifiable disease”, most existing policies fail to recognise COVID-19 and insurance companies are choosing not to extend their policies to reflect the outbreak.
Commenting, Aberdeenshire East MSP, Gillian Martin said
At a time when there is so much uncertainty for businesses I am calling on all insurance companies to step in and recognise COVID-19 as a notifiable disease in any existing business interruption policies.
I have been contacted by a number of businesses who have paid their insurance premiums over a several years and have never claimed before. Yet now in a time of great need they are simply being left to fend for themselves with insurance providers offering no financial support.
For nurseries like Flowerpots who are working so hard to keep our children safe and providing an essential service to so many families, it is simply not good enough and more action needs to be taken.
Measures to support businesses by insurance providers would go a long way in addressing serious concerns raised in the event that businesses have to close due to coronavirus.
Alison King, Managing Director of Flowerpots Nursery, added
Early learning and childcare centres are providing a lifeline service to parents and carers working across a broad sector of industries and for public sector staff to keep the country going through these unprecedented times. We want to remain open and help support the workforce in protecting the community and the economy.
When working on our preparedness on the possibility of being instructed to close we were shocked and stunned to be told by our insurer they will not cover us. COVID-19 is a disease recognised by the world health organisation yet the insurance company refuse to recognise this. We pay over £3,000 to insure our two settings and have never claimed in ten-years of business.
Owners up and down the country and desperately working on what to do now to help families, try to retain staff along with maintaining service to deliver 1140 hours from August.
Mrs Martin also raised the issue in the Scottish Parliament chamber with Fiona Hyslop, Cabinet Secretary for Economy, Fair Work and Culture, who has urged the UK Government to bring forward emergency powers for the Scottish Government to direct companies to close.
This measure would mean that those with policies that do have business disruption cover will be able to claim. However, this will not affect the vast majority of SMEs who have standard policies.