INSURANCE


“Depending on your policy’s wording … forced closure means that a few different business interruption insurance clauses may apply under different names – including public emergency, restrictions on use of premises or denial of access”


contaminated, or at risk of being contaminated by a highly contagious disease and have been forced to close as a result. In some instances, the extension may be linked to a specific list of notifiable diseases not including COVID-19 – which was obviously unknown at the time the policy was drafted. In this scenario the insurer is likely to refuse cover on this basis, but we would argue that in most cases, it hasn’t been specifically excluded from the policy either. Cover may also be provided under this


extension for closure of premises on the order of a Government authority due to “other sanitary arrangements”. Casinos and betting shops have been forced to close as social distancing regulations cannot be guaranteed in such spaces. These sanitary arrangements are the reason closure has been imposed, meaning a claim could potentially be made under this extension; this is especially the case if the insurers have argued that COVID-19 should not fall under the definition of a notifiable disease under the policy.


You were forced to close


Contamination risks in the gambling sector are high; chips, slips, cards, screens and machines are handled by many daily. For this reason, the UK Government has forced businesses in this industry to close during the ongoing pandemic. Depending on your policy’s wording, this forced closure means that a few different business interruption insurance clauses may apply under


different names – including public emergency, restrictions on use of premises or denial of access. The public emergency extension, for


example, provides cover for the actions or advice of a public authority, due to an emergency which is likely to endanger life or property and then prevents and hinders the use of, or access to, the insured’s premises. The Covid-19 outbreak has been declared a “Public Health Emergency of International Concern” as of 30/01/2020 and is constantly referred to as an “emergency” in government public information adverts, so the public emergency status of the situation cannot be contested. There is chance that your extension


excludes infectious diseases. This is a way for insurers to avoid claims arising from both public emergency and notifiable disease extensions – but they can’t have it both ways. If your insurer argued that COVID-19 does not fall under the definition of notifiable disease for the purposes of the one extension, then they cannot argue it is a notifiable disease for the purposes of another.


Next steps for businesses in the gambling sector?


Examples given above are not exhaustive, and each policy wording is unique, which is why the first step is to get yours reviewed by a professional. Now is the time to act: most policies set out claims conditions which require policyholders to notify them of an event which may give rise to claim “as


soon as possible”, or in some cases “immediately”. Although it is hoped that insurers will be lenient with regards to this issue, the risk is that many businesses may have left it too late to claim. For your claim to be valid, your policy


may also require you to notify your insurer that your premises are vacant, and inspect them weekly, both internally and externally, while maintaining a record of these visits. Although the Association of British Insurers has stated that some insurers have waived these conditions due to the lockdown, it remains important to check if this is the case with your insurer. To make a claim, you will also have to


prove financial loss. Businesses solely operating online will not be able to claim under a business interruption insurance policy, as it will be impossible to prove damage to premises has occurred. Those with both physical and online operations will need to prove that the closure of the physical premises has resulted in loss. This shouldn’t be too hard to prove for betting shops, as sporting events have been suspended across the globe, leaving betters with little in the way of betting options. The existence of a parallel online platform can also prove an attempt to mitigate losses, which would help the claim. Going forward, casino and gambling business should ensure that their proposed policies are sufficient for their needs, and ideally brokers should be contacted to advise and organise cover meeting sufficient requirements.


MAY/JUNE 2020 35


Olivier Le Moal/Adobe Stock


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