Who can you talk to about your existing business services?
Check with your existing business service suppliers to see what support you may be able to receive from them during the Coronavirus outbreak.
Commercial insurance – updated 25.03.2020
Most commercial insurance policies are unlikely to cover pandemics or unspecified notifiable diseases, such as COVID-19. However, those businesses which have an insurance policy that covers government ordered closure and pandemics or government ordered closure and unspecified notifiable disease should be able to make a claim (subject to the terms and conditions of their policy). Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Further information is available.
We advise you to talk your insurance providers as soon as possible. They are the best people to give you advice on what will happen if you must close your businesses as a result of the coronavirus.
We also advise you to check the wording of your insurance policies thoroughly as some standard policies may not include protection if businesses are impacted due to an outbreak of disease.
Two things to do:
1. Check to see if you have Business Interruption Cover in your insurance policy.
This is a type of insurance coverage that covers the loss of income that a business suffers as the result of a disaster. It is different from property insurance cover as this only covers any physical damage to a business.
2. Once you know you have Business Interruption Cover, you need to check whether you have an extension for “notifiable diseases”.
If you do have this cover then you need to contact your insurance provider as soon as possible to check whether the coronavirus is covered in this extension.
If it isn’t included then you can ask for it to be included, but your insurer is within their rights to either refuse, or to ask you for an increased premium.
If the only barrier to your business making an insurance claim was a lack of clarity on whether the government advising people to stay away from businesses, rather than ordering businesses to shut down, was sufficient to make a claim on business interruption insurance:
- the government’s medical advice of 16 March is sufficient to enable those businesses which have an insurance policy that covers both pandemics and government ordered closure to make a claim – provided all other terms and conditions in their policy are met. Businesses should check the terms and conditions of their specific policy and contact their providers if in doubt.
In the case that you are not covered, we recommend taking advantage of the government’s support package. A business rates holiday, HMRC support, VAT deferrals and the business interruption loan scheme could all help to ease some of the burdens to you and your business.
In order to reduce business costs, now could be an opportunity to review your commercial energy and utility bills.
The rise of energy and utility bills has become an unwanted burden to businesses over the last few years, putting increased pressure on them. The market is hugely competitive, and it can often take time to shop around to find better deals.
If you are looking to reduce your costs immediately, we’d suggest trying Utility Options. Bira members get a free electricity, gas and telecoms ‘health check’ when using the service, and Utility Options will do all the work in presenting you with their recommendation on who will save you the most money.
See https://bira.co.uk/services/utilityoptions/ for more.
If your business has to close temporarily, no need to panic as the vast majority of your energy costs will automatically drop right off. This is because your “usage” will more or less cease and that is what drives most of your cost. As for standing-charges, don’t worry about these are they’re pretty minimal for most businesses anyway.
But our key tips for you are as follows:
- Firstly, take all steps to take advantage of the huge financial support that is available from the Government. Far better to draw in the additional income that is available than to fall into arrears with any bills.
- It is very important to communicate closely with your energy suppliers. If you need to close down then you must tell them, so that they know, and keep them advised of on-going plans.
- Remember to send in regular meter readings, even better send in regular photographs of your meter, to evidence that there is no usage going on. This will prevent incorrectly estimated bills being issued.
- Avoid cancelling your energy DD’s if you possibly can. If you follow the steps above, the DD’s should be pretty small anyway with small standing charges and minimal usage.
- Our understanding is that energy suppliers will view clients much more favourably if you communicate with them.
- Finally, don’t forget that if your contracts are due for renewal, you still need to handle them as normal to avoid succumbing to out of contract rates. We are still here for you and will be in touch with you as normal to take you through the renewal process.
Speaking to your existing suppliers
Now is the time to chase customers and suppliers for outstanding payments.
Contact anyone that owes you money and ask them to pay you immediately. Not only are you entitled to it but being paid the outstanding amounts could help cover some of the costs you will need to consider in the short term.
Still trading? Whether it’s still business as usual or you are trading at a reduced capacity, it could be worth speaking to your suppliers to see if you can lengthen your credit terms or maybe set up a payment schedule.
Though they are completely within their rights to refuse, there is no harm in asking the question and if you have good credit/payment history as well as a good relationship with them, they may be willing to support you.