Can I use my Business Interruption insurance to make a claim?
The FCA’s test case in the Supreme Court ruled overwhelmingly in favour of policyholders. However, business interruption cover generally has the prerequisite of physical damage or loss to the property (or in some circumstances, the presence of a notifiable disease at the property or within a certain radius of it), to recover losses caused by the interruption to your business. The onus is on insurers to re-assess those claims which are impacted by the Supreme Court’s judgment and to make contact with the policyholders regarding next steps. If you have not already made a claim, in the first instance the terms of any policy should be checked carefully to see whether business interruption cover is provided.
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- On admission to hospital, all adults should be assessed for frailty, irrespective of their age and Covid-19 status. Regard should be had to any comorbidities and underlying health conditions.
- If a patient is identified as potentially having Covid-19, the UK Government guidance on infection prevention and control measures should be followed.
- If Covid-19 is then diagnosed in someone who is not isolated from admission or presentation, the UK Government guidance on actions required when a case was not diagnosed on admission should be followed.
Employers had until 31 July 2020 to make any claims for claim periods up to 30 June 2020. That was the end of the old scheme.
From 1 July 2020, claim periods must start and end within the same calendar month and must be for at least 7 days unless you are claiming for the first few days or the last few days in a month.
You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.
For example, if an employee is furloughed for 7 days spanning a month. You can claim the last 3 in one month, and 4 from the next.
The crucial point is that you cannot make claims that cross calendar months.
The first time that you could make a claim for days in July 2020 was 1 July 2020. You could not claim for periods in July 2020 before this point.
It is almost impossible to completely guard against the risks associated with contractor insolvency, but there are some steps which can assist in mitigating and managing the risks involved. To be in the best possible position, it is worth considering the following at the outset of any project:
- Check the contractor’s financial position – particularly the specific company which will enter into the building contract, as the employer’s rights will be against this company rather than the business as a whole
- Take legal advice to ensure that the building contract is properly drafted with appropriate provisions to deal with an insolvency event
- Consider requiring a performance bond and/or parent company guarantee (each serve slightly different purposes)
- Obtain collateral warranties from the consultants and sub-contractors involved, so that there are contractual rights against other parties if the contractor is no longer able to meet claims
- Consider requiring retention bonds, advance payment bonds or vesting certificates if necessary
- Project bank accounts and escrow accounts can also provide some further assurances for the parties involved
No. You should always treat employees consistently and fairly, but this doesn’t mean treating them all the same, or applying the same requirements. For those employees who have been homeworking and doing so without any problems, then they should be allowed to continue to do so.
We would anticipate that the vast majority, if not all, businesses will be approaching the return on a phased basis, which inevitably means some employees returning to work sooner than others. In reality then, you aren’t treating everyone the same, but try to be fair and consistent; you need to do what works best from a business perspective, but can you rotate people, require them to come in at different times etc. Where people perceive that the planned return is being worked out fairly they are far more likely to buy into this, which will help avoid resentments building up between colleagues.
The government has stated that the scheme will apply to apprentices and that they can continue to train whilst they are furloughed. However you must pay at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage for all periods of training during furlough leave, taking into account the rate increases from 1 April 2020 and the increases which will take effect from 1 April 2021. This means that you will be responsible for any shortfall in the amount claimed under the scheme and the appropriate minimum wage.
We recommend that you get in touch to discuss any queries on furloughing apprentices.