Covid-19 – Government Support & Insurance Cover Considerations
As there is such a large volume of information to digest in terms of support for businesses from the Government, as your broker we wanted to bring the below to your attention as we feel it is particularly pertinent.
Support For Businesses Through The Corona Virus Business
Interruption Loan Scheme
The new Corona virus Business Interruption Loan Scheme supports SMEs with access to working capital (including loans, overdrafts, invoice finance and asset finance) of up to £5 million in value and for up to 6 years.
The government will pay to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will not face any upfront costs and will benefit from lower initial repayments.
The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.
This scheme is being delivered through commercial lenders, backed by the British Business Bank.
You are eligible for the scheme if:
- your business is UK based, with turnover of no more than £45 million per year
- your business meets the other British Business Bank eligibility criteria
How To Access The Scheme
The scheme is now open for applications. To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites.
All major banks are offering this scheme. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.
Please do take a look at the Government website for a more comprehensive guide to what is available. Click here for the main page or use the links below to be directed to specific areas.
The CBI is also running a daily Coronavirus Webinar at 10am covering a range of topics that are relevant to business owners, such as sick pay and cyber security. For further details and to register, please click here.
Insurance premiums are often a large expense for a lot of companies and so many of our clients chose to finance their premium. The majority of these premiums are funded through Premium Credit Limited.
We have approached them regarding what help they can provide to our policy holders, in terms of payment holidays or refinancing the premiums etc.
They have a system in place whereby they will review each finance agreement on its own merits.
It is important to point out that many commercial insurance premiums are ‘non refundable’ meaning that finance premiums will still be due even if a policy is cancelled.
Assistance with your Premium Finance
We recognise that at this time, many customers will struggle to make payments. Premium Credit Limited are quickly reacting to the moving landscape in their approach to dealing with this.
Customers can contact us at firstname.lastname@example.org or 0330 123 9717.
Any requests for forbearance will be carefully considered on a case by case basis and we will keep you updated.
Most insurers will allow a period of 30 days of a property being unoccupied before imposing additional terms.
A typical definition of an Unoccupied Property will note that the property must be furnished and operating in a normal function, after a period of 30 days they will consider the property to be Unoccupied. During this period this could be difficult to comply with.
Once insurers define the property as being Unoccupied, they will usually restrict cover, typically to Fire, Lightening, Earthquake and Aircraft damage, they may also ask that services are turned off (unless supporting a security system) or heating left at a low ambient temperature to avoid freezing pipes. They may ask that the property is inspected internally and externally at least once a week and a log kept.
We have approached some insurers about how this will be considered in light of the national situation. We are also waiting to hear more clarity from the Association of British Insurers.
We will be on hand to answer your calls or emails should you have specific queries.
Computers / IT Equipment whilst away from the premises
More of us have taken computers home in order to use them away from the premises.
Policies will usually respond to items damaged, stolen, fire damaged etc while the items are at the premises. Some people would have chosen to insurer some equipment whilst away from the premises (usually laptops/tablets)
Home insurance will often cover Business Equipment owned by you while at your home. Equipment owned by an employer being used at home would generally not fall under your own home insurance policy.
Should you wish to cover your equipment whilst at your employee’s premises then you are likely need to adjust your policy.
Fleet Insurance and Laid-Up Cover
While some of us will be back to work shortly, there may be a period for some where they may not be able to trade for some time. During this time you may choose to leave your vehicle off the road.
Some insures will allow a reduction in your insurance cover to just Fire & Theft cover in return for a reduction in your premium.
This will need to be referred to each insurer on an individual basis. Please contact us should you need us to speak in more detail about this
IT IS IMPORTANT TO SAY THAT INSURERS ARE DOING ALL THEY CAN TO BE FLEXIBLE WITH POLICY COVER DUE TO THIS HUGE CHANGE IN OUR LIVES
Please get in touch if you have any questions