Help for small businesses during Coronavirus

We are facing unprecedented times globally and the impact on your businesses is a key concern. Here is some advice for small businesses:

Government help available

The government has announced £330 billion worth of guaranteed loans for all businesses, this means businesses can access funds on ‘favourable terms’.

For SMEs, this means an extension of the Business Interruption Loan facility to allow businesses to borrow up to £5 million with no interest payments due for the first six months. This is an increase on the £1.2 million figure announced in the budget, and the scheme will be up and running by the start of next week.

Business Rates

The Chancellor has announced that all businesses in the retail and hospitality sectors will pay no business rates for the next 12 months regardless of size and those under RV £51K will be able to apply for cash grants. Retail BID are liaising with Birmingham City Council regarding the grant application process.

Business Loan

The Coronavirus Business Interruption Loan Scheme means that the government will encourage finance providers to continue lending to small businesses throughout the coronavirus crisis.

The funds are accessible via loans and other types of financial support though nearly 40 business lenders. Find out more about which lenders are part of the scheme along with the type of support each can offer by visiting the British Business Bank website.

Paying tax

If your business is having trouble paying any tax it owes due to coronavirus, call HMRC’s dedicated COVID-19 helpline on 0800 0159 559 to talk about Time to Pay support.

Reclaiming sick pay

The government are introducing new legislation to allow small businesses to reclaim two weeks’ worth of Statutory Sick Pay (SSP) to cover the costs of any absences due to COVID-19. It is currently unclear what the repayment mechanism will be, we will keep you updated as we hear more.

Please ensure you keep a record of staff absences due to coronavirus COVID-19, also please be aware employees don’t need to provide you with a note from their GP.

The government has also changed the rules on statutory sick pay, it is now payable from day one of self-isolation instead of day four. But this change is a temporary measure to respond to the outbreak and will lapse when it’s no longer required.

Self employed/sole traders/zero hour contracts

The new sick pay regulations don’t extend to zero hours workers or those who are self employed.

Anyone in this position is being urged to apply for any relevant benefits as soon as possible, and look into business interruption loans or other financing options, including payment breaks and mortgage holidays.

Will business interruption insurance cover coronavirus

Some business insurance policies will protect against these scenarios, but others won’t – the Association of British Insurers recently published information stating if cover does exist, it will typically not be a standard inclusion. To determine if you have cover in place to protect against the risks the coronavirus outbreak poses to your business you will need to check your policy wording.

Policy wording

If you are covered, then the Business Interruption section of your policy will be the relevant one for coronavirus.

You can find this section by looking at your policy schedule to see if the Business Interruption section is included, then follow this into your policy wording to see what it covered and if there are any extensions applicable or restrictions to this cover.

Typically, business interruption cover can protect against virus outbreaks and diseases like coronavirus, but insurers tend to cover against known diseases rather than new viruses or diseases like COVID-19.

To find out if you’re covered, you need to:

  • Look for a list of specific diseases that are covered. Generally the insurers list of covered diseases will include: Acute Encephalitis, Acute Poliomyelitis, Anthrax, Chickenpox, Cholera, Diphtheria, Dysentery, Legionellosis, Legionnaires Disease, Leprosy, Leptospirosis, Malaria, Measles, Meningococcal Infection, Mumps, Ophthalmia Neonatorum, Paratyphoid Fever, Bubonic Plague, Rabies, Rubella, Scarlet Fever, Smallpox, Tetanus, Tuberculosis, Typhoid Fever, Viral Hepatitis, Whooping Cough or Yellow Fever.
  • Look through this section for any applicable cover relating to ‘Notifiable Disease’ (without a specified list) or contagious and/or infectious disease. You may find this under the ‘Extensions’ section of your policy wording.
  • Coronavirus COVID-19 has been labelled by the government as a ‘Notifiable Disease’, which means if your policy covers these diseases (without a specified list), you may have some cover in specific scenarios.

 

Read the wording to determine how broad your cover is and in what scenarios it applies

Even where coronavirus can be covered (as a Notifiable Disease, for example) your Business Interruption section won’t cover you simply because the virus exists, and certain events will need to happen before your insurance kicks in, such as:

  • Your business being closed by the government or a local authority.
  • The Notifiable Disease is present at your premises or within a specified distance of your premises (refer to your individual policy wording for the specifics to your policy).

Insurance policies, and particularly the Business Interruption section, will be in place to potentially provide cover for loss of income or profit (depending on your policy) should your business be closed.

WE WILL KEEP YOU INFORMED AS NEW GUIDELINES ARE RELEASED