Insurance policies for UK's biggest pub group do not cover Covid-19

The UK’s biggest pub group has warned its publicans that their existing insurance policies will not cover them for loss of business because of coronavirus.

Ei Group – formerly known as Enterprise Inns and which owns a portfolio of more than 4,000 pubs – has told its managers that Covid-19 is not included in the group’s policy with the insurer Zurich and has advised publicans to consider seeking further cover elsewhere.

Industry sources indicated that it appears likely the problem could be replicated in other sectors.

In a letter sent to publicans last week, which has been seen by the Guardian, Ei said: “It has been confirmed that Zurich is not including Covid-19 in its notifiable diseases section. As such, any business affected by Covid-19 will not be able to claim for loss of trade.”

The move comes after many small-business owners had thought a problem with making insurance claims for coronavirus losses had been solved.

Earlier this month the government bowed to pressure by changing its stance on insurance to declare coronavirus as a “notifiable disease” – a formal classification required by many insurance policies.

However, many of these existing policies cite specific diseases that businesses can claim for. As coronavirus is so new, it is not included in most of the lists.

A spokesperson for the Association of British Insurers said: “A small number of businesses may have cover in place that will specifically provide for business interruption arising from notifiable diseases. However, this type of extension is not commonly included as standard. Standard business insurance policies are designed and priced to cover standard risks and are therefore unlikely to provide cover for the effects of global pandemics like Covid-19.”

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Viv English, who runs the Lansdown Arms in Lewes, Sussex, said: “We have no Premier League games and maybe a 20% to 30% hit on trade. I have been paying into the policy for almost 20 years, it is compulsory for us to have it [as an Ei tenant] and it is going to let us down just when we need it.

“We’re going to take a real hit and I already know I can’t pay my VAT bill. We are now paying VAT [due from] December when it was Christmas and everything was fab. We are now thinking if it is better to close down for a few months and pick up then?”

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Last week Rishi Sunak unveiled a range of moves in his first budget that were designed to assist pubs and other small businesses where trade is likely to be hit by the virus.

The chancellor said he was also making big changes to the business rates paid by pubs this year, in an effort to insulate them from the economic effects of the coronavirus.

Leisure businesses with a rateable value of less than £51,000 will pay no rates for the next 12 months, while the “pub discount” given to bars with a rateable value of up to £100,000 will increase from £1,000 to £5,000 this year.

A spokesman for Zurich said: “Zurich’s cover for business interruption is fully aligned with the rest of the insurance market. We will always respond whenever one of our policies is triggered and are continuing to support our customers on a case-by-case basis.”

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