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BUSINESS DISRUPTED SUPPLY CHAINS
employers should be flexible with proof of illness – it may
not be readily available.
It follows that there will be employees worried about
exposure to the virus in the workplace. Here Rayment
advises “handling such concerns very sensitively but
firmly”. The more vulnerable (over 60 or with a health condition)
can be helped with adjustments – homeworking or
off-peak start and finish times. But as Rayment explains: “If
no agreement can be reached and the employee insists on
not coming to work, and they are well, there is no legal obligation
to pay them.”
Of course, non-attendance could lead to disciplinary
action. However, Rayment advises caution when dealing
with pregnant or otherwise high-risk employees as “there is
a risk of discrimination claims… and if there is a genuine
health and safety risk posed by being required to attend
work, then disciplinary action might lead to a constructive
dismissal or detriment claim”.
Employers do need to remember that employees are
entitled to reasonable time off work to help someone who
depends on them – a child off school or a sick parent – in an
unexpected event or emergency of which coronavirus is but
one example. But as Rayment says: “There is no statutory
right to pay for this time off. The amount of time off an
employee takes to look after someone must be reasonable
for the situation.” Again, he suggests being sensible with
paid time off, possibly followed by holiday.
But there is an elephant in the room – how workers cover
sick colleagues. On this, Rayment defends requests from
employers for those remaining to cover those off work, and
he does so on the basis that “many contracts give employers
an express right to vary duties and hours in line with the
need to be reasonable under the circumstances; employees
are also under an implied duty to obey lawful and reasonable
instructions”. His advice to employers is to consult
affected employees before changing hours or duties to avoid
the risk of employment claims. That said, coronavirus offers
a powerful argument for changes on a short-term basis.
Insurance
Good insurance is the bedrock of
good business, but only if the right
policies are in place.
Laura Dawson, communications
adviser at the Association of
British Insurers, says insurers are
well aware of the “uncertain and
difficult time for families and businesses”.
Printweek April & May 2020
She continues: “Insurers’
main priority is to make sure
customers can continue to have their claims paid in this
challenging environment.”
Naturally, a key worry for firms is whether they are
covered for coronavirus-related risks; it’s painful to report
that those with ‘standard’ policies will only be covered for
‘standard’ risks which is unlikely to cover coronavirus. Even
so, Dawson says “that those who are unsure what their
policy covers should check with their insurer”.
Sadly, a good number of firms claiming for business
interruption are finding that notifiable disease is not a covered
peril. This is because in terms of business interruption
cover, most policies cover only fire, flood or storm, and
sometimes the breakdown of essential equipment. Cover
could also involve firms being unable to access their premises.
The problem, as Dawson explains, is that “businesses
may have chosen to purchase cover that specifically
provides for business interruption arising from ‘notifiable
diseases’… but they are usually named”. By definition,
coronavirus is so new, it’s unlikely to be named in
any policy.
The main hope for policyholders, says
Dawson, is to examine the terms if the
business has purchased a ‘non-damage,
denial of access’ extension to a business
interruption policy: “If a business is
forced to close or is told to close by an
appropriate authority or is cordoned off,
this could trigger a claim even if the
infectious disease cover is unspecified or if it
includes Covid-19.”
For the purposes of continuity, some businesses
may consider having certain
staff working from
home. While Dawson says that cover will be provided by
standard home insurance policies, assuming that the work
is clerical in nature, that’s not always the case: “If individuals
are working from home and receiving visitors to their
home on business matters, there may be some restrictions
in cover such as loss of money and theft being excluded
unless there is evidence of forcible and violent entry to the
property.” And to this, she says business equipment, such as
a laptop, is likely to be uncovered. “We would expect the
employer to be liable for ensuring their equipment is
insured away from the office.”
Insurers’ main priority is to make sure
customers can continue to have their
claims paid in this challenging environment”
Laura Dawson Association of British Insurers
On travel, Dawson reassures that trips already booked
under existing policies remain unaffected, subject to government
advice. Indeed, all overseas travel has effectively
been banned until early May and as Dawson says: “Anyone
travelling to a country or region against government advice
risks invalidating their travel insurance.”
It’s comforting that, as she adds, “travel insurance may
cover some out-of-pocket losses and expedite return to the
UK if that’s the advice and if you are unable to get assistance
from any other source”. Further, if policy holders are quarantined
overseas, they should be covered too.
A policy may also cover non-refundable cancellation
costs, but it won’t cover ‘disinclination to travel’ where the
government has advised against travel.
Income and illness are not welcome bedfellows. Some
may be fortunate if they have an income protection policy –
a sick pay-style product. The problem is that most policies
have a waiting time of between three to 12 months before
paying out. However, Dawson advises that it can be
between one to four weeks for short-term policies, and
there are some short-term policies that provide cover from
day one of absence. She adds that invariably self-isolation is
not covered. Again, the key is to check the policy terms.
Lastly, some firms will have trade credit insurance that
covers loss if customers pay late or don’t pay at all. While
the cover is still available, “it won’t,” as Dawson says, “cover
loss of production volume or the insolvency of a supplier,
only the failure of a customer to pay for purchased goods”.
To finish
It’s true – there is much doom and gloom around, but sight
shouldn’t be lost of the fact that the sky hasn’t fallen, the
world hasn’t ended, and society will surely get through the
coronavirus outbreak. But it’s going to take – and this is an
understatement – some managing and time. Keep calm
and try to carry on.