Covid-19: Business Interruption Insurance

Lord Clement-Jones Excerpts

Tuesday 17th March 2020 Lords Chamber

Asked by

[Lord Clement-Jones]

To ask Her Majesty’s Government what consideration it has given to the ability of entertainment and hospitality businesses to claim on their business interruption insurance policies where customers have been advised to stay away but no order for closure has been given.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Baroness Barran) (Con)]

My Lords, the Government understand that this has been an unprecedented time for these industries and that Covid-19 has indeed had a very profound impact. At the Budget last week, the Government set out a £30 billion fiscal stimulus to support British people, British jobs and British businesses. I think the noble Lord will be aware of the statement this morning from the Association of British Insurers saying that the vast majority of businesses would not be covered for business interruption of the type we are talking about under their insurance, but my right honourable friend the Secretary of State is having calls across the industry this afternoon to make sure that our lines of communication are open.

[Lord Clement-Jones (LD)]

My Lords, I thank the Minister for that reply. I, too, have read the statement from the ABI. This is a major issue which has rightly received extensive and negative attention in the media. These businesses are in limbo and are threatened with ruin as a result of being unable to invoke the terms of their business interruption insurance policies. Will the Government now reconsider their policy and direct closure, as has been the case in so many continental countries? It is much more likely—although not certain, as the ABI statement makes clear—that claims will be successful in those circumstances. The other alternative is for the Government to put their own scheme in place where insurance is not available. It is incumbent on the Government to show that they understand what business is facing.

[Baroness Barran]

The noble Lord is quite right. Across government we are trying to understand the challenges that business is facing, which is why all Ministers are in regular, frequent conversations with the key stakeholders they represent. I referred to the package of measures in the Budget, but we know that given the scale and speed of this epidemic we need to do more and we need to do it quickly, which is why the Chancellor will be addressing the other place with a package of measures at 7 pm today.