You need more than insurance when disaster strikes

You need more than Covid-19 business interruption insurance

The High Court has just handed down its long-awaited judgment in the Covid-19 business interruption insurance test case brought by the Financial Conduct Authority. This follows the rejection by insurance companies of many claims by businesses that had applied for pay-outs under their BI policy clauses for losses suffered during the 105 day government mandated lockdown.

The judgment has been seen as offering a lifeline to many SMEs severely impacted by Covid-19, within the hospitality industry in particular. It says that those businesses can now claim on their BI insurance policy to return themselves to the position that they would have been in had it not been for the pandemic.

This should be good news for the estimated 370,000 policyholders impacted by the judgment, but unfortunately it is not the end of the story. Insurers have already lodged an appeal against the ruling and the case is likely to have to go to the Supreme Court to be resolved. And now, with the number of Covid-19 cases rising explosively in a second wave, the government is rapidly moving into a second set of lockdown measures, perhaps just as strict as the first.

Of course, not all insurance policies cover BI, with some policies only paying out if property is damaged such as during a fire or flood, rather than where a business is affected by a pandemic, public closure or denial of access.

So, whilst insurance remains a vital tool to enable a business to survive a business disruption, it cannot be relied upon as a silver bullet to cover all eventualities. The onus remains strongly on any business owner or director to put in place measures to ensure that the impact of any critical event is mitigated, so that loss of revenue and reputation is minimised.

Most businesses that have BI insurance in place will have been required by their insurance company to draw up a business continuity plan as a condition of offering cover. But having a written BC plan sitting in a folder on a shelf is very different from having a plan that actually helps you when disaster does strike.

This is where a critical event platform can really help a business to bring their BC plan to life. Leading edge platforms can host the BC plan in the cloud, so that it is always available, and can enable virtual testing of the plan to ensure a well drilled response when a critical event hits.

When a critical event does strike the platform should be able to mobilise and direct the incident response team during the golden hour immediately post-incident when long-term damage and loss can still be mitigated. It will also be able to automatically document the timeline of the incident and its impact on staff and customers to provide crucial evidence for an insurance claim post-event.

The platform can also provide vital assistance to get a business back on its feet more smoothly during the business recovery phase, for example when employees are returning to the office to work from furlough or remote working.

A Return to Work Survey carried out by International SOS found that 64% of businesses are updating their BC plans and procedures to ensure a safe return to work. 50% are conducting fit-for-work health screening and 56% are using Covid-19 compliance monitoring technology tools.

A number of our customers have told us that they have been using Crises Control to monitor the health and wellbeing of employees during remote working and that they are now using the same tool to monitor employee health status as they plan a return to the office.

During a pandemic it is people rather than technology or buildings that become unavailable, and during an event like Covid-19 technology can provide the solution to connecting employees back to their office or place of work to smooth the return to business as usual.

Our vision here at Crises Control is to democratise emergency communications and simplify the management of crises, and our aim is to accelerate the resilience planning of our customers. 

Shalen Sehgal
Managing Director, Crises Control